Bitcoin mining difficulty adjustment

Bitcoin miners don’t care: New hashrate all-time high amidst strong price drop

The latest difficulty adjustment, effective at block height 735,840, increased mining difficulty by 4.89%. In this overview, we’ll analyze the effects on mining and profitability.

Bitcoin’s difficulty adjustment in numbers

The latest difficulty adjustment occurred at block height 735,840, mined on May 10. Total hashrate at the time of the adjustment averaged 223.7 EH/s.

Hashrate was 4.97% higher than the 213.1 EH/s from the last change.

As a result, difficulty rose 4.89% from 29.79T to 31.25T. This represents the second consecutive increase and a new all-time high for Bitcoin mining difficulty.

Source: Coin Metrics

Difficulty adjustment effects on Bitcoin mining profitability

The difficulty increase, alongside with the negative price action bitcoin is going through at the moment have led to a significant loss in profitability. Both factors contributed to miner revenue reaching yearly lows.

Hashprice dropped 18.75%, from $0.16 to $0.13, setting a new yearly low. Revenue per hash per second hasn’t been this low since December 2020. Additionally, daily miner revenue has dropped ~12M since the previous adjustment and is now sitting at a $30.1M average.

Source: Coin Metrics

Implications of the latest difficulty adjustment

Miner revenue has taken one blow after the other since the end of 2021. The negative price action, added to hashrate’s sustained growth has led to a 69% drop in profitability since last year’s highs.

Nevertheless, not everything is bad news. Hashrate growing during the strong drop bitcoin’s price is experiencing is a powerful demonstration of strength and resilience from miners. It states that their long-term optimism is intact and that, despite the plummeting profitability, providing security to the network is still worth it.

That said, it’s clear that miners are here for the long run. However, with a large amount of hashrate expected to come online in the coming months, it’s likely that we’ll see mining profitability dropping further.

Time will tell how much more retracement miners can endure before having to turn off their computers. So far, they don’t seem to be too worried.

TL;DR:

  • Difficulty adjustment block height: 735,840
  • Date of the adjustment: 05/10/2022
  • Average hashrate at the time of the adjustment: 223.7 EH/s
  • Previous difficulty: 29.79T
  • Current difficulty: 31.25T
  • Difficulty change: +4.89%
  • Miner revenue per hash per second (hashprice) after adjustment: $0.13

About Titan

Titan provides powerful services for crypto mining at scale, including the first enterprise-grade mining pool. Titan is also the builder of the Lumerin Protocol, a peer-to-peer, open-source solution that makes crypto mining hashpower a tradable, liquid financial asset, unlocking mining profitability and providing greater access to capital.

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Titan Mining

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We deliver software and services for crypto mining at scale. A Bloq Inc. company. Visit us on https://titan.io.