Bitcoin Mining Difficulty Drops And Experiencing The Sharpest Decline Since 2011
The huge price drop in the cryptocurrency market has led to a sharp decline in Bitcoin mining difficulty in recent weeks. Yesterday, the difficulty fell again (-15%), marking the second biggest drop in its history.
According to experts this is absolutely normal. The Bitcoin hashing algorithm has been designed to adapt to fluctuating prices and the arrival of new, more efficient mining equipment.
The difficulty is adjusted periodically (every two weeks) depending on the hash power deployed by the miners on the network.
The difficulty has greatly increased in recent years, the largest decline recorded in October 2011 (-18%).
Last month, Mao Shixing, the founder of F2Pool, claimed that between 600,000 and 800,000 miners would have stopped extracting Bitcoin.
While the price of bitcoin has recently fallen to its lowest level in 13 months, below $ 4,000, mining operations using machines manufactured in 2016 and 2017 simply can not reach the breakeven point." he had said.
This severe drop follows a first major drop of 7% recorded in mid-November.
In a recent MarketWatch article, Atulya Sarin, a professor of finance at Santa Clara University, said that bitcoin seemed to be entering a "spiral of death."
Mining at a cost higher than the cost at which it is possible to sell in the futures market destroys the value.
However, other specialists seem less worried. Yesterday, in an interview with Bloomberg, Malachi Salcido, the CEO of Salcido Enterprises, explained that the "big boys" with specific business models could continue to undermine and that the situation should be over in February 2019.