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BITCOIN MINING DIFFICULTY ADJUSTMENT

Bitcoin mining is now ~8% more profitable after the third difficulty drop in a row

Analyzing Bitcoin’s difficulty adjustment and mining profitability

The latest difficulty adjustment, effective at block height 745,920, reduced mining difficulty by 5.01%. In this overview, we’ll analyze the effects on mining and profitability.

Bitcoin’s difficulty adjustment in numbers

The latest difficulty adjustment occurred at block height 745,920, mined on July 21. Total hashrate at the time of the adjustment averaged 198.15 EH/s.

The network’s total computing power was 4.97% lower than the 208.52 EH/s from two weeks before. As a result, difficulty dropped 5.01% from 29.15T to 27.69T.

This constitutes the third difficulty drop in a row, and the largest one since July 3, 2021 — an adjustment marked by China’s crackdown on mining. It’s also the first time since March that hashrate dives below the 200 EH/s line.

The difficulty adjustment and Bitcoin mining profitability

The timing for this adjustment couldn’t be better, as this difficulty decrease coincided with BTC breaking out of the $18–22K range. As a result, miners got a nice profitability boost after months of seeing their revenue take a hit.

The short-term scenario seems positive for miners. The difficulty drop and BTC price action led hashprice to jump from $0.10 to $0.108, an ~8% increase from the day before the adjustment.

The recovery is even more spectacular if we look at the previous difficulty change, which was on July 6. Since then, miner revenue per TH/s has increased 24.13%.

Implications of the latest difficulty adjustment

Just when we started seeing some capitulation, Bitcoin miners got some relief with a BTC bounce and a large downward difficulty adjustment.

Whether this event leads to a trend reversal or is only a brief delay before further capitulation remains to be seen.

Whatever the case, the short term scenario seems positive for miners, who got a much needed profitability boost.

TL;DR:

  • Difficulty adjustment block height: 745,920
  • Date of the adjustment: 07/21/2022
  • Average hashrate at the time of the adjustment: 198.15 EH/s
  • Previous difficulty: 29.15T
  • Current difficulty: 27.69T
  • Difficulty change: -5.01%
  • Miner revenue per TH/s (hashprice) after adjustment: $0.108

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We deliver software and services for crypto mining at scale. A Bloq Inc. company. Building @lumerinprotocol. Visit us on https://titan.io.