Bitcoin (BTC) Mining Difficulty Changed: Analysts Commented on the Reason!

According to the latest correction posted by BTC.com on Monday, Bitcoin (BTC) Mining difficulty increased by 3.27%. So why this ups and downs? For industry experts, the reasons are not entirely clear.

Analysts Say The Recent Rise in Bitcoin Mining Difficulty May Be Due To Miners’ Unlucky To Issue Blocks In The Last Period

A possible explanation is the switching of machines and the introduction of more efficient models, depending on spot energy prices and profitability. But it could also be a matter of luck, says Daniel Frumkin, Braiins’ director of research.

“My theory is that the ‘capitulation’ that seems to have taken place in the last period (which led to the December 6 regulation) is greatly exaggerated and it’s really just a very ‘unlucky’ period of divergence,” Frumkin said.

Difficulty adjustments are based on what the average block time is for that epoch, i.e. the period in between. In other words, as the block extraction times extend, the Bitcoin network assumes that the hash rate drops and lowers the difficulty.

Ethan Vera, COO of Luxor, explained:

“In more detail: Let’s say you own 10% of the total network hashrate. This means you have to remove 10% of the blocks. However, due to the probabilistic nature of mining, you may be unlucky and only extract 5%, just as you may be lucky and extract 15%.”

Theoretically, the entire industry could be lucky or unlucky. With the same amount of total network hashrate, 140 blocks can be reached one day and 150 the next.

Vera said it was “very likely” that luck had an effect on the 7.32% drop a few days ago, but it is also very difficult to know for sure “how much of the difficulty adjustment was due to luck and how much was due to actual accurate network hashrate changes.”

On the other hand, the increase in the Hash rate in general indicates that the demand for the Bitcoin network has increased, as well as an indication that the network is even more reliable.

*Not investment advice.