A while back, in China, the controversial measures against crypto instead. China banned mining of in a short time bitcoin (BTC) with all its consequences. For example, the hashrate, the time it takes to create a block to mine, and miners in China were told to pack their things.
The void that this created had a major impact on the remaining miners. Because the hashrate plummeted, the profits of remaining miners also fell. The total power of the mining network dropped by more than 50%. Ultimately, this would lead to mining difficulty Was adjusted.
Profits soar
In the meantime, the network is slowly recovering to the old levels. According to the analysis firm Glassnode, miners’ profits have risen by about 57% since their lows a while back.
#Bitcoin miner revenue per hash has climbed by 57%, returning to mid-2020 levels as the Great Migration continues.
The typical 900 $ BTC mined per day are distributed between ~62.5% of the peak hash-power seen in May
See more analysis in The Week On-chainhttps://t.co/jj6CzAnKRV pic.twitter.com/68xHXwcraK
— glassnode (@glassnode) August 17, 2021
Also, the strength of the mining network is gradually returning to the levels before the bad developments in China. At its peak in May this year, the network was mining about 180 EH/s. This is now 112.5 EH/s.
Difficulty adjustment
The main reason for this recovery is the adjustment of the difficulty. The difficulty determines how difficult it is for miners to block to mine. By scaling this difficulty down it is therefore easy for miners to mine bitcoins.
As a result, it became attractive to mine again. As a result, miners from China moved to other countries such as the United States and Mongolia. Adjusting the difficulty was so effective that the miners profit increased by 57%.
Eventually when it becomes too easy to mine, the difficulty is increased again. This has also happened in the meantime. Over the past week, the difficulty is slowly increasing put up.
The measures in China had major consequences for the bitcoin network, that much is clear. However, the extent to which the network was able to recover in a relatively short period of time is remarkable. If even one of the largest economies in the world can’t get bitcoin down, who or what can? For that reason, many analysts also call bitcoin indestructible
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