Reducing the difficulty of the Bitcoin network allows BTC miners to confirm transactions using fewer resources. BTC hashrate is inversely related to the difficulty of its network.
When the difficulty of the Bitcoin network is reduced, smaller miners will have a chance to compete for mining rewards.
Read more: The future and prediction of Bitcoin price in 2022
Reducing the difficulty of the Bitcoin network
The difficulty of mining a Bitcoin (BTC) block decreased by 5% to 27.693 trillion. Bitcoin network difficulty has been falling since reaching an all-time high of 31,251 in May 2022. Network hardness is a tool invented by the creator of Bitcoin, Satoshi Nakamoto, to ensure the complete legitimacy of transactions.
Reducing the difficulty of the Bitcoin network allows miners of the market’s largest cryptocurrency to confirm transactions using fewer resources. This will give smaller miners a chance to compete for mining rewards.
According to data from blockchain.com, Bitcoin remains the most flexible and immutable blockchain network in the world. The difficulty of the Bitcoin network and the hash rate of this cryptocurrency are inversely related to each other. As the network difficulty decreases, we see a 3.2% increase in Bitcoin’s hash rate. As Bitcoin fell to $25,000 in June, the BTC hashrate hit an all-time high of 231,428 EH/s. This incident increased the concerns of experts in the field of Bitcoin miners’ widespread electricity consumption.
By banning cryptocurrency transactions and mining operations in China, the United States began its effort to create the largest contribution to the global Bitcoin hash rate. Chinese miners resumed operations in September 2021. According to Statista data, the United States currently holds 37.84% of the total Bitcoin hash rate. After America, China with 21.11% and Kazakhstan with 13.22% have occupied the second and third places.
Cointelegraph has reported in the past that the sharp drop in GPU prices has opened a small window for small-scale miners in the market. Miners could get more powerful and efficient cryptocurrency mining equipment at a reasonable cost. Miners see GPU price reduction as a way to compensate for their operating costs in the cryptocurrency bear market.
The Bitcoin Mining Council’s report largely eased the concerns of environmentalists. This report shows that nearly 60% of the electricity used to mine digital currencies is provided from sustainable sources.
On the other hand, the Bitcoin Mining Council stated that BTC mining accounts for only 0.09% of the total 34.8 billion tons of carbon emissions worldwide, and that Bitcoin accounts for only 0.15% of global energy supply.
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Source: cointelegraph