Following China’s harsh crackdown on the country’s cryptocurrency business, the Bitcoin blockchain saw its biggest-ever drop in mining difficulty. The mining difficulty at block 689,471 had dropped by roughly 28% on Saturday.
The dramatic drop in difficulty resulted in a commensurate drop in transaction fees. This may have contributed to a £723 jump in the price of BTC in anticipation of a spike in transactions. ByteTree Asset Management’s CIO, Charlie Morris observed that costs had reduced to £4.34 from £7.24 the day before.
The change marks the first time since December 2018 that mining difficulty has decreased for three months in a row. According to data, the mining difficulty reduced by 16 percent and 5% on May 29 and June 13, respectively.
The difficulty of Bitcoin is calculated using an internal score that started at one. Depending on how many miners are competing on the network, it increases or decreases incrementally. It now has a score of 14,363,025,673,659, down from 19,932,791,027,262 previously.
The Bitcoin blockchain updates at a consistent and predictable rate: one block every 10 minutes or so. Block time is the time it takes to create new block, however this can vary depending on how many miners there are on the network and the speed of their computers. When there are more miners attempting to “discover” the next block and receive the 6.125 BTC reward, the blocks solve faster. Block timings can slow down when miners leave the network, leaving fewer miners to compete.
The mean hashrate, a measure of total processing power provided to the blockchain through mining, was 87.7 exahashes per second during this most recent difficulty period, the lowest since December 2019. That is down from a high of around 180 exahashes per second around mid-May. As a result, Bitcoin’s average block time slowed dramatically.