Blockchain reports bitcoin mining difficulty to have decreased for the first time in the last two years with a 0.62% drop to 40,007,470,271 from 40,300,030,238. Last month’s figure represented the peak of bitcoin mining difficulty, while the last decline experienced was in late 2012.
Bitcoin mining difficulty refers to how hard it is to “hash a new block” which “varies based on the amount of computing power used by miners on the Bitcoin network,” as explained by a CoinDesk article. However, the networks current hash rate (roughly 294 MN GH/s) is reportedly not in danger. As more and more people have joined the growing bitcoin payment network, the difficulty to mine new blocks has steadily increased. Analysts suggest the latest decline is due to a price decline and estimate the next difficulty level to be 39,884,219,890.
As quoted by the same CoinDesk article, Zhenya Tzvetnenko, executive chairman of digitalBTC, says,
Cost and availability of power is the major limiting factor on mining. Power costs obviously have a natural lower limit and, unlike cost of hardware or power efficiency of hardware, cannot keep halving – no matter how efficiently sourced. Given this limit, we have expected difficulty would slow down in the short term or even go backwards as we have seen.”
Analysts say as the Bitcoin network reaches equilibrium, the price of bitcoin must increase or the cost of mining must decline. They suggest that, should the price recover, there will be more investment in additional capacity. However, because bitcoin prices are difficult to predict, it remains unknown whether or not this will be the actual outcome.
Read more here- “Bitcoin Mining Difficulty Decreases,” (P.H. Madore, CryptoCoin News)