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. heatwave, 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,” said Jason Mellerud, senior researcher at Arcane Research.
- It’s the third consecutive decrease in mining difficulty – the first time this has happened since four straight declines one year ago as Chinese miners packed up their rigs thanks to that country’s ban on bitcoin mining.
- “The plummeting BTC price likely caused the initial drop in the hash rate at the middle of June, 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 instead of 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.