Bitcoin (BTC) mining is just the same as discovering a new physical source. You need money, energy, and resources to mine elements like gold. Same is the case with Bitcoin. Where heavy machinery is used to discover precious metals, Bitcoin mining requires computation and power to discover new blocks.
Bitcoin mining difficulty is the measure of the amount of resources used to discover and mine. The difficulty has increased by 13% after the China crackdown.
How did China Crackdown affect Bitcoin Mining?
Just as in real life when there are more machinery and more resources put into mining the more metals are discovered. Bitcoin algorithm works the same way. When more miners are available and operating on the network, the more easy it is to mine new blocks. As the miners become less, less amount of blocks are discovered. Bitcoin has a self-stabilizing mechanism. The algorithm works in such a way that a block is to be discovered every 10 minutes. To compensate for the less amount of miners the blockchain automatically adjusts itself. This algorithm was built in the blockchain when the network was launched around 10 years ago.
The blockchain’s mining difficulty increased by 13.2% at block 697,536, according to several mining sites. The rate is adjusted after every 2 weeks and is an important factor in determining the miner’s profit margin.
What Future does Mining holds?
Even though the difficulty has increased the experts say that it is highly profitable.
“Bitcoin mining has never been more profitable” said Dave Perrill, CEO at crypto mining colocation company Compute North. “Look at the percentage of price run that Bitcoin had over the last 12 months and look at the hashrate percentage increase, and it’s nowhere near in line.”
During the crash of the market, the price of mining rigs dropped down but now as Bitcoin has rallied towards the upside, the prices of the rigs have also increased again, showing that the miners are still interested in the network and in the long run they still think that it will pay off.
At the time of writing, BTC is currently being traded at a price of $47,126 with a decrease of 0.79% in the last 24 hours.
