Bitcoin Hashrate Downtrend Leads to Largest Negative Difficulty Adjustment in a Year
Data shows that the recent Bitcoin hashrate decline has led to the largest negative adjustment in mining difficulty in the past year.
Bitcoin mining difficulty plummets as hash rate continues to drop
According to the latest weekly report from Arcane Research, Thursday will observe the biggest drop in mining difficulty since July 2021.
“Mining hashrate” is an indicator that measures the total amount of computing power connected to the Bitcoin blockchain.
The higher the value of the calculation, the better the network performance is usually, and the more decentralized the hash rate, the stronger the network security.
The hash rate also represents the competition between the different miners connected to the chain. As such, as the indicator goes up, so does the “mining difficulty”.
This happens because the Bitcoin network must maintain a constant block discovery rate. Since more mining power means miners reach hash transactions faster, the block rate also goes up. And to compensate for that, the network increases the difficulty.
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Naturally, a decreasing hashrate can lead to negative adjustments in difficulty. The chart below shows how the BTC hashrate has changed over the past year.
Looks like the value of the metric has observed some decline during the last few weeks | Source: Arcane Research's The Weekly Update - Week 28, 2022
As you can see in the graph above, the 7-day average Bitcoin mining hash rate has decreased recently and is now around the same level as in March of this year.
The latest decline has been so sharp that the mining difficulty will see its biggest negative adjustment since a year ago this Thursday.
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Here’s a table showing how the various miner-related metrics have changed over the past week:
The daily miner revenues seem to have plummeted 4% in the past seven days | Source: Arcane Research's The Weekly Update - Week 28, 2022
The block rate has dropped to 5.53 per hour, which is significantly lower than the value of 6 per hour required by the network. Because of this, the difficulty is expected to decrease by almost 6% in the next patch.
BTC price
At the time of writing, Bitcoin’s price is hovering around $23.6k, up 20% in the last seven days. Over the past month, the crypto has increased by 15% in value.
The chart below shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have sharply risen up during the last couple of days | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, Arcane Research
