Bitcoin Mining in Recession: Good News for “Survivors”

Fewer miners, more Bitcoins? – Consent of proof of work (PoW) of Bitcoin (BTC) requires computers (now specialized / dedicated) that perform calculations to validate blocks of network transactions. This process, extractionit is strong enough influence from fluctuations in the price of BTC. Thus begins the decline in prices in recent months be heardAnd some miners give up. As we will see, this causes a general drop in difficulty of extraction.

Less competition and more Bitcoin

The hash rate, or hashrateof the Bitcoin network represents the computing power total number of computer machines that process the calculations necessary for your consent by proof of work. Satoshi Nakamoto, creator of Bitcoin, assured that: Moreover there are miners / devices doing these calculations e Moreover the difficulty to solve them increases. And viceversa.

With a BTC course it has dropped abruptly heading towards $ 20,000 (or even less until recently), many crypto-miners have seen their business no longer be profitable enough to continue. Because of electricity costs in particular, the most vulnerable favorite Stop their cars, at least temporarily.

If at first only downgraded the overall computing power (hence the hashrate), Bitcoin is then programmed in such a way that the difficulty of mining fitsbut with a slight split in time. The difficulty has just decreased by approx 5%to settle down 27.7T (Teras), according to data from Blockchain.com.

Bitcoin network mining difficulty.

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The “survivors” of mining on a small cloud

The difficulty of mining bitcoin therefore adjusts automatically. This way miners can continue to find / extract transaction blocks at the same pace. This adjustment occurs roughly every two weeks. To be precise, everyone 2,016 blocks of transactions BTC, about 10 minutes each.

If enough less profitable miners throw in the towel, two weeks after the hashrate falls, the difficulty decreases, thus reflecting a loss of competition. Result: it becomes statistically Easier to mine / earn bitcoins for the remaining miners.

The benefit of BTC’s price drop is to cause some sort of ” natural selection “where the miners with the lower production cost (electricity costs) are rewarded.

This favors the places where bitcoin is produced overcapacity – or even waste – of energy production, because the cost per kWh is generally very low there. What if the price of bitcoin was come back upstairsit would also be good, this time for the safety of the network. In fact, if new (or old) miners (re) enter the race, the difficulty would increase again. And the greater the difficulty, the lower the 51% risk of attack it’s tall. Satoshi Nakamoto came up with a damn invention there well thought out.

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