Bitcoin mining is getting easier after China’s crypto crackdown wiped out network capacity

Bitcoin mining is getting easier after China's crypto crackdown wiped out network capacity
Bitcoin shot up in the first months of 2021 before tumbling in May.

  • Bitcoin's "network difficulty," which measures how much computing power is needed to mint a new bitcoin, has plummeted.
  • The clear culprit is China, where the government's anti-crypto tack has forced mining operations to shutter.
  • Network difficulty could bounce back as Chinese miners migrate elsewhere.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
  • A measure of how hard it is to mine bitcoin is plunging after China's crackdown took out a chunk of the computing power underpinning the network.

    Bitcoin's "network difficulty," which measures how much computing power is needed to mint a new bitcoin, has fallen 45% from its May highs, according to public blockchain data. The drop is smaller but still pronounced, about 26%, when using 30-day moving averages.

    Bitcoin mining is getting easier after China's crypto crackdown wiped out network capacity
    Bitcoin's network difficulty falling sharply

    Bitcoin's underlying algorithm regularly adjusts difficulty based on how many miners are on the network. Falling difficulty indicates mining power has come offline.

    The clear culprit is China, where the government's anti-crypto tack has forced mining operations to shutter from Sichuan to Xinjiang.

    The country, which once accounted for 65% of the world's mining power, has forced a "seismic shift" in bitcoin mining patterns. In the wake of China's restrictions, nearly a quarter of active bitcoin addresses went offline, according to analytics firm Glassnode. In the end, 90% of China's bitcoin mining capacity is set to be shut down, according to the Global Times, a newspaper run by China's Communist Party.

    Network difficulty, which automatically updates about every two weeks, could bounce back as Chinese miners migrate elsewhere, possibly to Central Asia or North America.

    "It's happening! Texas will be the crypto leader," tweeted Gov. Greg Abbott after a local grocery chain said it would start accepting crypto at kiosks. The tweet came just days before China tightened the screws on crypto mining.

    Read the original article on Business Insider

    FACEBOOK TWITTER EMAIL COPY LINK Start Trading >> Plus500. 72% of retail CFD accounts lose money

    Indices in This Article

    Dow Jones 33,962.04 -2.09%
    NASDAQ Comp. 14,274.98 -1.06%
    S&P 500 4,258.49 -1.59%
    NASDAQ 100 14,549.09 -0.90%
    NASDAQ Fut. 14,255.50 -1.08%

    RELATED EXCHANGE RATES

    Markets Insider

    Source: markets.businessinsider.com

    Popular news...