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Bitcoin mining difficulty drops for the first time in 5 months

Bitcoin mining difficulty drops for the first time in 5 months

After 9 consecutive increases, mining difficulty has finally decreased. Let’s see why and how this latest change affects miners.

Bitcoin’s mining difficulty adjustment in numbers

The latest difficulty change occurred at block height 711,648, mined on Sunday, November 28. The hashrate at the time of the adjustment was 159.81 EH/s — 1.44% lower than the 162.15 EH/s from the previous difficulty change.

After the adjustment, difficulty fell 1.49% from 22.67T to 22.34 and stopped a 9-epoch long growing streak since July.

Bitcoin mining difficulty (Source: Coin Metrics). Why has difficulty dropped?

The Bitcoin protocol automatically adjusts difficulty according to the total hashrate mining on the network every 2,016 blocks — or 2 weeks approximately. Thus, this latest decrease means that there are fewer miners now than there were two weeks ago.

Why have some miners disconnected? Although it’s impossible to tell for sure, we can estimate it is due to a couple of reasons.

The first and most likely one is price action. BTC experienced a 10% dip that led it from $59K to $53K — a new monthly low.

Price is one of the most decisive factors of Bitcoin miners’ profitability. Miners saw their revenue drop 8.88%.

For many miners — especially those who don’t have access to low electricity prices — , that kind of move means mining is no longer profitable. Mining at a loss, these miners had to turn off their machines, leading to the drop in hashrate.

Bitcoin price and miners’ revenue in USD comparison (Source: Coin Metrics).

Secondly, there’s a technical reason. Last week, there were reports that many mining pools were undergoing connectivity issues, causing disruption and disconnection to miners.

According to CoinDesk, these issues were related to DNS “poisoning” and most likely due to the Chinese government interference on these pools’ operations, pr...

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