Bitcoin mining is set to get harder once again as the global hashrate starts to recover. Bitcoin’s hashrate had dropped off a cliff after a widespread crackdown on mining operations within China in June. The Bitcoin hashrate has improved by 15 percent since the Chinese crackdown. Hashrate refers to the amount of computing power used in one second when mining for Bitcoin.
The recovery is associated with miners shifting their base of operations from China to other nations. China was once home to 65 percent of the global hashrate capacity for Bitcoin. Chinese mining operations ceased abruptly when national authorities cracked down on all mining operations. Bitcoin hashrate now stands at 100 million terahashes per second (TH/s), which means that 100 million trillion calculations are made every second while trying to mine for Bitcoin.
According to US-based mining company Luxor’s weekly newsletter, Bitcoin’s mining difficulty is likely to increase as August kicks in. “For the first time since China’s hashrate went lights out, we’re anticipating next week’s adjustment to be positive, a roughly 1.75% increase,” reported Business Insider quoting the newsletter.
Mining operations have reportedly moved from China to other nations like the US, where several states are offering cheap renewable energy for mining farms. But while the recovery is welcomed by advocates of the cryptocurrency, it means lowered profits for miners.
As hashrate increases, so does the difficulty of mining Bitcoin. The higher degree of difficulty leads to longer mining cycles, which in turn results in higher energy bills and lower profit margins. Bitcoin’s adoption and use has been widely hampered by its carbon cost -- a result of its enormous computation requirements and electricity needs.
Bitcoin’s prices were recording a rally after falling from peak levels in the middle of May. The cryptocurrency had risen 30 percent within the weak to briefly cross $40,000. According to investors, $40,000 is the expected resistance point for Bitcoin, with $42,500 being the next resistance level.
The recent developments in Bitcoin’s hashrate and prices will have cryptocurrency possibly return to a bullish market.
(Edited by : Shoma Bhattacharjee)