Jul 05, 2021 12:00:00

Bitcoin mining difficulty is significantly reduced, and it is predicted that 'mining business profits will increase by 35%'

China was a major mining base for providing computer resources and obtaining virtual currency (cryptographic assets), but due to the tightening of regulations by the government in June 2021, many miners I was forced to shut down. Meanwhile, on July 3, 2021, the difficulty of mining Bitcoin (difficulty) was adjusted significantly negatively, and experts who predict that 'the profitability of mining companies will increase by 35%' have appeared. ..

Bitcoin mining difficulty drops after hashrate collapse in China
https://www.cnbc.com/2021/07/03/bitcoin-mining-difficulty-drops-after-hashrate-collapse-in-china-.html

Bitcoin Mining Profitability to Rise 35% While Ousted Chinese Miners Face Delays Relocating – Mining Bitcoin News
https://news.bitcoin.com/bitcoin-mining-profitability-to-rise-35-while-ousted-chinese-miners-face-delays-relocating/

Since a large amount of electricity is required for mining virtual currencies, many miners gathered in China, where electricity prices are low, and nearly 70% of the world's bitcoin mining was carried out in China. However, in June 2021, China rapidly tightened its crackdown on crypto assets and stopped supplying electricity to its mining business. The tightening of regulations has caused the price of Bitcoin to fall sharply, as well as the price of graphic cards, which are indispensable for mining.

Bitcoin finally falls below 30,000 dollars (about 3.3 million yen) due to tightening regulations in China, some say that it will be positive for Bitcoin in the long run --GIGAZINE

'For the first time in the history of the Bitcoin network, mining in areas affecting more than 50% of the network has been completely shut down,' said Darin Feinstein, founder of American mining operators Blockcap and Core Scientific. I commented.

Due to the suspension of mining in China, the total hash rate (computing power per second) of Bitcoin worldwide has dropped significantly. According to PC Watch , the highest hash rate since the statistics of 180.666 EH / s was recorded on May 14, but the hash rate as of July 1 after only one and a half months is 89.036 EH / s. In fact, the mining speed of Bitcoin has dropped by more than 50%.

Bitcoin is set so that new blocks are generated once every 10 minutes, and in order to suppress fluctuations in block generation time due to fluctuations in the total hash rate, the Difficulty is adjusted regularly. going. In the adjustment made on July 3, the Difficulty was adjusted negatively by about 28% in response to the sharp drop in the total hash rate, which was the largest softening in history.

Mike Colyer, CEO of Foundry, which provides expertise and capital to blockchain companies, said of Bitcoin's Difficulty Adjustment: 'This is a self-regulatory market and does not require any decision by an external committee. This is a very powerful concept. '

The fact that Bitcoin mining is regulated in China while the difficulty of mining itself is reduced is a great advantage for existing miners.

Kevin Zhang, head of mining at Greenridge Generation , an American power plant and mining company, said, 'Minor is a company because all miners share the same economy and mine on the same network.・ Both individuals will see an increase in profits. '

According to Zhang, when using the latest generation of mining equipment, the revenue was $ 22 per day before the adjustment of Difficulty, but after the adjustment, it was $ 29. It is expected to become. Whit Gibbs, founder and CEO of mining operator Compas , said, 'We expect minor profitability to improve by 35%,' Feinstein said. 'Increase in revenue and profits for the foreseeable future.' I expect it. '

According to Feinstein, most of the computers used for mining in China were older generations, which were inefficient and had low profit margins. Feinstein argues that the shutdown of a Chinese mining operator, which was a major mining hub, will reduce the power consumption of the entire mining network and promote the decentralization of the mining network.

It is difficult to predict how long the hash rate will continue to decline in the future. However, it is not easy for miners who have been forced to shut down in China to move overseas, so if the Chinese government does not change its policy, the hash rate may continue to decline for several months. ..

Although the promising land that can be used as a mining base is limited, the United States is particularly active in investing in mining businesses by venture capital, and there is room to accept businesses that have withdrawn from China.