Promoting Bitcoin Mining from a Historic Difficulty Adjustment

According to the note published by Miguel Arroyo in Criptonoticias, this 2021 was the year in which Bitcoin experienced the greatest period of mining difficulty in its history. In that order of ideas, and in order to counteract the greater demands that are falling on mining activities, Bitcoin would be experiencing one of the greatest adjustments of said difficulty that has always oscillated in an approximate of -28%.

The "mining difficulty" is a cryptographic value that determines how difficult it can be to mine a block. Currently, that difficulty is at 1.993 billion, this being a number and not a unit.

The value in question is adjusted in periods of 2.016 blocks, which occurs on average every two weeks. Adjustments are made with respect to the average time it takes for blocks to be mined. Therefore, if a block takes more than ten minutes to mine, the difficulty drops, and vice versa. Given these considerations, it was extremely historical to know that on July 1 of this year, on the Bitcoin network, the block with the longest waiting time to be mined was reached, specifically 2 hours and 19 minutes.

The situation described has determined that cryptocurrency miners have the possibility, in the next period of difficulty, and as of this July 3, to enjoy an increase in profitability of up to 30%; this also depending on the maintenance of the hash rate current, understood as the “mining power”.

The referral hash rate has been affected, according to data and references from the University of Cambridge, by the recent veto carried out by China to the miners, a country that owned 65% of hash rate world of Bitcoin; which has determined that these miners must migrate to other countries and delay in the reestablishment of their activities.

The action taken by China (adoption of anti-mining policies), according to specialists, would be motivated by factors other than environmental issues, which are speculated associated, for example, with the launch of the digital Yuan; but they would seem to continue to increase. There are various complications that cryptocurrencies are going through today; For this reason, it is convenient that the agents and participants of the industry are responsible in the adoption of actions that promote its responsible use and, in turn, highlight its greatest benefits (eg its versatility to be used as a means of support for development of other activities or promotion of products such as financial ones). 

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Erika Rios
Erika is a lawyer from the Peruvian University of Applied Sciences (UPC). He has experience in banking regulatory advice and financial transactions, mainly in financing with local and foreign financial entities. He currently works at Vodanovic Legal, an expert legal firm in financial law issues. He specializes in Banking Regulation and Fintech.

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