Hashrate drops
More than 54% of bitcoin’s hashrate, which is the collective computing power of miners worldwide, has dropped off the network since its peak in May. The Bitcoin code has re-calibrated to make it approximately 28% less difficult to mine.
Miners who are still plugged into the network stand to make greater profits while most of the network’s miners move offline.
It just became substantially easier and much more profitable to mine for Bitcoin.
Bitcoin mining puzzles
A bitcoin miner runs a program on a computer to try to solve a puzzle before anyone else is able to complete it.
Solving the puzzle completes a block, a process that both creates new bitcoin and updates the central digital ledger tracking bitcoin transactions. How are these puzzle set? Typically, it takes about 10 minutes to complete a block puzzle.
The bitcoin algorithm is programmed to handle an increase or decrease in mining machines and has adjusted to accommodate the lack of mining in China.
China big player?
China was the main centre for Bitcoin miners, with mining estimates of around 70% of the world’s output before China altered their policy. But a recent government crackdown in China has effectively destroyed the country’s crypto mining market almost overnight.
China could very easily reverse their policy, making this a short term interruption. But if not, most mining crypto experts agree that it will take anywhere from six to fifteen months for all of that idle mining capacity to migrate.
Does China have a plan to create its own crypto currency?
For the moment, the U.S. looks well positioned to take up some of the slack.
Green energy use?
Is it acceptable to use all this energy for mining? I guess it is okay if it’s green energy – isn’t it?
What other better uses could all this power put to?