[2020-04-07] No More Relief for Bitcoin Miners

[blacky90]

The previously expected even bigger relief for the Bitcoin (BTC) miners is not coming. Instead, starting tomorrow, Bitcoin mining difficulty, used as a measure for how hard it is to compete for mining rewards, is set to increase as more miners turned their machines on in the past two weeks.

Following the second-largest drop in Bitcoin mining difficulty of 15.95% on March 26, there were initial estimates that the next adjustment may bring an even larger drop. Yet, a day before the scheduled event, major Bitcoin mining pool BTC.com predicts (09:33 UTC) a rise of 1.80%. This would bring the difficulty up from 13.91 T to 14.16 T, or somewhat lower than it was in the second half of January this year. Though it may not sound like a large increase after the historic drop, it does provide another sign of a current shift from the overall redness in the market, including the drops in price, mining difficulty, and hashrate.

Meanwhile, hashrate, or the computational power of the Bitcoin network, increased by 11% in the past two weeks, reaching 105 EH/s, or the level last seen in mid-January. At the time, the hashrate had been rising all the way until the market took a plunge in March.

https://cryptonews.com/news/no-more-relief-for-bitcoin-miners-mining-difficulty-to-incre-6227.htm

[hugeblack]

Perhaps a rebound in prices and less concern about COVID-19 risks in China will drive more mining power.
Do not forget that we are about 35 days away from the Bitcoin Block Reward Halving and many people are worried about some economic shocks in the short term.
Generally, I don’t know it is a news headline, it happens every two weeks.

[kro55]

A drop in hashrate is never good news because this simply means less people mining, less secured network. People with cheap electricity continued to mine during the $4k prices in March, but people with more expensive power turned their miners off (mostly Western world) which puts the first group (mostly East, China, Russia) in power.

[Carlton Banks]

A drop in hashrate is never good news because this simply means less people mining, less secured network.

To an extent I agree, although there will be (eventually) a natural ceiling in the hashrate. But really, it's unlikely to reach such a point before a vast amount of cumulative hashing has taken place at progressively higher mining difficulties. Let's not forget that this provides an increase in security against chain-rewriting attacks (currently several hundred days of security according to this graph), and the protection provided increases exponentially according to how much more work is performed in each new block.

People with cheap electricity continued to mine during the $4k prices in March, but people with more expensive power turned their miners off (mostly Western world) which puts the first group (mostly East, China, Russia) in power.

Sure, and it doesn't really matter. The bitcoin protocol doesn't care where the hashrate comes from, it only cares whether the hashrate is following the rules on the chain which has accumulated the most PoW. If that means that the cheapest electricity sources are used more when the hashrate drops, all that does is increase the incentive for more hashrate demand in those regions where any lower costs are available (not just electricity, although that is the main cost in BTC mining).

[buwaytress]

Perhaps a rebound in prices and less concern about COVID-19 risks in China will drive more mining power.
Do not forget that we are about 35 days away from the Bitcoin Block Reward Halving and many people are worried about some economic shocks in the short term.
Generally, I don’t know it is a news headline, it happens every two weeks.

Where Í'm from, it's even the medium and long term that we're very worried about. We've had a few of those shocks before. I've lived through economic downturns (only old enough to really remember 2) but this is truly the first that everyone is hurting from. Miners not excluded. There's a lot of expectation around halving now, and that's grown even more now.

[sureshverma]

Further it will only get worse, the complexity of the process itself will increase

[icewitch0612]

The activity of miners is getting harder and less profitable every day, and this is bad.

[Harlot]

The activity of miners is getting harder and less profitable every day, and this is bad.

That's why miners need to always adjust in order to mine profitably. We always have seen news and releases where antminers aside from being more efficient also consumes lower electricity, we have seen foreign crypto miners migrate to other countries which have cheaper electricity, and we also have seen crypto farms using renewable energy to cut down their electricity expenses if not entirely. Crypto miners always need to adjust and I think they will still do this when the halving comes. The increase in mining difficulty only means that there are more miners now running their operations and I think it just shows there are still a lot of people willing to mine BTC even if the BTC halving is coming.

[Carlton Banks]

Crypto miners always need to adjust and I think they will still do this when the halving comes.

and it's easy to forget that exactly this (miners readjusting to the new block reward) has already happened twice before. There's no compelling reason to believe they will not do so again for this imminent 3rd block reward halving.