On Monday the Bitcoin mining difficulty experienced its second-biggest drop in its history after a -15.3 percent decrease. At a time when the prices of cryptocurrencies especially that of Bitcoin have been in free fall, this revelation comes as welcome news for all Bitcoin miners who have seen their profits dwindle amid coin devaluations.
Bitcoin mining difficulty adjusts after every two weeks
The top crypto coin was designed to adapt its hashing difficulty after every two weeks automatically. A system that helps the network maintain the regular 10-minute block time. It’s the second adjustment since the crypto winter began in mid-November.
The latest decrease in the mining difficulty marks the second biggest drop in the history of Bitcoin. The most significant drop occurred on Oct. 31, 2011, when there was a -18 percent adjustment. Then there was another adjustment in mid-October of the same year, a -13 percent decrease which now stands as the third largest decrease.
Bitcoin miners delight
Last week, Mao Shixing, the founder of the largest Bitcoin mining pool, F2Pool estimated that around 600K-800K miners had shut down. It was due to lack of profitability from the activity.
In September when Bitcoin was trading at $6,400, Shixing estimated that the break-even for Bitcoin miners was between $3,891 and $11,581. The determinant being the make and the model of the machine being used.
So, according to Sam Doctor of Fundstrat, Bitcoin miners have every reason to be delightful. It’s because the decrease in the mining difficulty pushes the break-even Bitcoin mining price even lower.
“Our model suggests the cash cost of mining each BTC on the Antminer S9 is now $4500, down from $5300 in September. Depreciation expense has fallen to $1300 vs. $2000 in September, reflecting a lower rig cost as newer devices have come to market. Fully loaded breakeven is now $5700, compared with a breakeven of $7300 in September.”