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Bitcoin mining difficulty adjustment

Bitcoin mining profitability slightly recovers after two difficulty drops in a row

The latest adjustment, effective at block height 727,776, reduced mining difficulty by 0.35%. 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 727,776, mined on March 17. The hashrate at the time of the adjustment averaged 196.45 EH/s.

Hashrate was 0.37% lower than the 197.19 EH/s from the last change.

Bitcoin mining difficulty (Source: Coin Metrics).

As a result, difficulty fell 0.35% from 27.55T to 27.45T. Despite the mild drop, this is the first time in eight months that difficulty has decreased twice consecutively.

Last time had been in July 2021, during the weeks after China’s crackdown on crypto mining. Back then, difficulty fell 54.02% over the course of four epochs.

Bitcoin hashrate (Source: Coin Metrics).

Difficulty adjustment effects on Bitcoin mining profitability

Since the start of the year, bitcoin’s price has ranged between the $36,000 and $44,000 lines.

Remember, miner revenue is a result of the ratio between bitcoin’s price and the network’s difficulty. That said, with price finding relative stability around the $40,000 average, mining difficulty becomes a determining factor in mining profitability.

As a result, this mild drop in difficulty has led to an equally mild recovery in mining profitability, which has been consistently dropping since October 2021.

Bitcoin mining revenue per TH/s, also known as hashprice (Source: Coin Metrics).

Hashprice jumped from $0.17 to $0.19, adding an additional two cents of revenue per TH/s. Additionally, total miner revenue is now sitting at $40 million per day — a 33.3% increase from the $30 million floor recorded after the last adjustment on March 3.

Implications of the latest difficulty adjustment

As minimal as it was, this difficulty drop is mostly anecdotal and has no meaningful impact on the mining landscape. This, in addition to the relatively stable bitcoin price, has led to profitability remaining virtually unchanged.

Into the future, it’s likely that hashrate will resume its growth trajectory as long as bitcoin keeps showing strength price-wise.

According to enterprise-level miners, mining Bitcoin is still highly profitable even after the consistent decrease in revenue since the final quarter of last year. In other words, there’s room for more hashrate to join the Bitcoin network, and with it, difficulty.

TL;DR:

  • Difficulty adjustment block height: 727,776
  • Date of the adjustment: 03/17/2022
  • Average hashrate at the time of the adjustment: 196.45 EH/s
  • Previous difficulty: 27.55T
  • Current difficulty: 27.45T
  • Difficulty change: -0.35%
  • Miner revenue per hash per second (hashprice) after adjustment: $0.19

About Titan

Titan provides powerful services for crypto mining at scale, including the first enterprise-grade mining pool. Titan is also the builder of the Lumerin Protocol, a peer-to-peer, open-source solution that makes crypto mining hashpower a tradable, liquid financial asset, unlocking mining profitability and providing greater access to capital.

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Titan Mining

Titan Mining

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