2022’s Bitcoin mining difficulty rate drop comes full circle as miners are torn between rising costs and a lower cryptocurrency price.
Since block number 766,080, the most significant drop has been recorded. It occurred after China banned the cryptocurrency mining industry and a bear market sank its teeth more profoundly in the global macro environment.
As the number of people trying to solve a particular problem increases, so makes the difficulty of solving that problem.
Over the past few years, the price of Bitcoin has remained relatively stable, but major players in the industry have faced significant challenges due to high electricity prices.
As we’ve seen, the price of Bitcoin has dropped sharply since mid-August. However, two significant events occurred during that period that could explain why the price dropped so steeply.
The Bitcoin Mining Difficulty Rate Has Fallen By 7.32%
The reality of crypto winter seems to have caught with the industry, and Bitcoin Miners are shutting down their machines. The hash rate has been steadily decreasing since November as the price of Bitcoin dropped. However, it remains far above the level seen after China’s s clampdown on the industry.
Two companies, Core Scientific and Argo Blockchain, have filed for Chapter 11 bankruptcy protection, while another company, Compute North, has gone out of business.
According to the price indicator, the profitability of Bitcoin (BTC) has decreased by about 20 percent in the last month. At these “low-profit margins,” even if you’re using an efficient miner like the AntminerS19jPro, you still need power prices under $0.08/kW.
On top of that (as well as that), electric bills have risen in the last couple of days, along with the cost of natural gasoline. As a result, miner operators who bought power at lower rates might see their costs increase enough to turn their operations into negative-margin ones.
With these new lower hash rates and difficulties, the network isn’t any more vulnerable to attacks than before.