The Bitcoin network has just refined a key parameter to persuade miners who quit after halving profits last week.
Since halving the network, more than 20 hexahashes of computing power have been shut down per second, which is equivalent to around 1.5 million older mining machines.
The 7-day rolling average of bitcoin’s hash rate has dropped more than 20% from around 122 EH / s before halving on May 11 to currently 97 EH / s. The four-year event reduced the miner’s block reward from 12.5 per block to 6.25 Bitcoin (BTC).
Halving the hash rate significantly exceeded the previous hash sprint. As a result, the difficulty in mining Bitcoin (a measure of the difficulty in competing for block rewards) decreased 6% to $ 15.14 trillion on Wednesday at 2:00 UTC.
This is the network’s first two-week difficulty adjustment since halving. In the past two weeks, the computing power associated with Bitcoin has been a roller coaster ride.
Bitcoin mining difficulty itself is adjusted every 2016 blocks (approximately 14 days) to ensure that the average interval between blocks is kept at 10 minutes. If a large number of miners are removed from the network, resulting in an average block interval of more than 10 minutes, the difficulty will be reduced to encourage participation.
“We believe that, as the halving drew closer, miners in China did a sprint run of mining, even with older generation machines, to make most of the last days of the higher block rewards,” said Kevin Zhang, director of blockchain strategies at Greenidge Generation, a New York-based natural gas power plant that mines bitcoin.
Alejandro De La Torre, Vice President of PoolIn, agreed that the miners will switch to mining as much as possible before halving.
“That’s why we saw those sky-high hash rate figures,” he said. But as the halving kicked in midway, he said, miners that were marginally profitable had to switch off.
That said, the decline in mining competition is helpful for those who are still in the game and who have even more efficient equipment and cheaper electricity prices, as they can get a larger amount from the 900 BTC parts minted daily. By adjusting the level of difficulty, De La Torre hopes that some (but not all) of these miners will restart.
As China’s summer rainy season approaches, mining operations in the country’s southwestern province are struggling to attract customers with electricity prices as low as $ 0.03 per kWh. The data show that after halving, the transaction fees paid to Bitcoin miners also increased. In addition to the block rewards, miners earn a fee for every transaction connected to the Bitcoin network.
The network’s daily transaction costs rose from around 30 BTC at the end of April to more than 160 BTC and now account for about 17% of the miners’ daily income.
“Another interesting observation we made was that transaction fees accounted for a significant increase in the total premium. Yesterday, transaction fees accounted for almost a quarter of Greenidge Pool payments,” said Zhang.
“Currently this percentage is in the 15-20% range, and it remains to be seen how this percentage will change and affect miners’ incentives.” he continued
The developments following the halving of Bitcoin continues to unveil itself with the leading currency expected to have a bullish run soon.
