The difficulty of mining a bitcoin block dropped by 5% on Thursday as miners turned off their machines to lower power demands on energy grids dealing with a U.S. heat wave, particularly in Texas.
- The bitcoin mining difficulty adjusts automatically every two weeks to keep the time needed to mine a new block roughly at 10 minutes. As more computing power gets plugged into the network, the difficulty adjusts higher, and as computing power gets pulled from the network – as has been happening recently, the difficulty adjusts lower.
- The difficulty on Thursday fell 5% to roughly the same level it was back in March, data from mining pool BTC.com shows.
- "The difficulty was reduced as American miners turned off their machines for significant periods over the past two weeks as electricity prices soared due to a heatwave," Jason Mellerud, a senior researcher at Arcane Research, said.
- It's the third consecutive decrease in mining difficulty and the first time this has happened since four straight declines one year ago when Chinese miners packed up their rigs because of the country's ban on bitcoin mining.
- "The initial drop in the hashrate at the middle of June was likely caused by the plummeting BTC price," Mellerud continued. "But the second drop at the beginning of July was likely caused by miners powering down in response to high electricity prices."
- When demand increases over a certain threshold, some miners can bring in more revenue by selling their contracted power to the grid as opposed to using it to mine bitcoin. Also known as demand response, this practice helps balance the load on a power grid by adjusting the demand as opposed to the supply.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.