According to the latest chart indicators, the 7-day average Bitcoin mining hashrate over the past six months reached levels just below the record high on November 13 but has subsequently dropped by 7.54%. The hashrate on the mentioned date was 27,18,45,421 TH/s and it has plummeted to 25,13,36,973 TH/s as of November 25.
But, once the hashrate changes, the block production rate (the frequency at which miners process new transactions) also adjusts since, after the change, miners now hash blocks either more quickly or more slowly depending on whether they have more or less processing power.
In order to fix the block production rate since the network doesn’t want this to occur, it modifies the value of the “mining difficulty” (a component of the blockchain algorithm that makes sure the chain validators mine at a steady, network-intended rate).
Because miners can process transactions more quickly as hashrate increases, the blockchain increases the difficulty to make them work harder and bring the rate back to standard levels.
The graph below shows that the difficulty of mining Bitcoin has increased to a new all-time high as a result of the most recent adjustment, which raised the value of the indicator.
The recent observation of hashrate levels that were very close to ATH is what causes the increased difficulty. However, some of them would find mining completely unprofitable following the increase and take their computers offline as a result because more difficulty means lower revenues for the individual miners involved.
These miners were already under a lot of stress recently due to the bear market which led to miners disconnecting their rigs and the low levels of hashrate.
The last time the cost of producing Bitcoin even exceeded the price at that time was in 2018, which led to miners’ surrender that lasted for months. Therefore, a similar capitulation might be anticipated if the complexity of regression grows but the prices don’t.
According to most latest Glassnode data, the price of a Bitcoin miner hashprice has also dropped to a new record low of $58.3k exahash per day. The value of the miner hash price is evaluated by measuring the relationship between daily miner revenue and mining hashrate.
The graph indicates that Bitcoin mining hashprice has been falling ever since the inception of cryptocurrencies. Rising mining difficulty is the main cause of this persistent drop.
Along with the BTC prices, which account for a sizable portion of the block rewards, the halving, which halves the block rewards in half every four years, is another element determining the miners’ income. The hash price deviates from the prevailing trend and experiences a brief increase during a bull market.
At the time of writing, Bitcoin is trading at $16,576.80, up 0.41% from the previous day but an overall 20.21% drop over the past month.
Additionally, the steady rise in energy usage has alerted regulators around the world, prompting the US and Europe to announce initiatives to address the problem.
The European Green Deal and REPowerEU Plan are two of the documents that the European Union (EU) announced on October 18 in order to implement energy conservation-driven programmes. The continuing Russia-Ukraine war had a significant impact on European energy supplies at the time the REPowerEU initiative was unveiled in May. In order to achieve energy sustainability, the plan seeks to reduce energy usage in the ICT industry, including blockchain.
In comparison to the US, Europe has been more active in the areas of energy regulation and cryptocurrency mining. The US released a 46-page report in September about the effect of crypto assets on the environment and energy. However, the findings were conflicting, and no substitute measures are revealed yet