After the halving, mining difficulty decreased by 6%, but hash rate is expected to increase again in the coming weeks.

Bitcoin mining difficulty is an important indicator of the competitiveness among Bitcoin miners. Due to the halving of Bitcoin rewards, many miners have lost profitability and chosen to exit the market. Following today's first difficulty adjustment after the halving, the mining difficulty has been reduced by 6%. However, with the arrival of the rainy season in China, it is expected to once again boost the overall Bitcoin network's computing power.

The First Difficulty Adjustment After Halving

Bitcoin mining difficulty adjustment is an important way for Bitcoin miners to achieve dynamic balance. The speed at which Bitcoin blocks are generated is designed to be maintained at approximately one block every ten minutes. After every 2016 blocks are mined (approximately two weeks), the Bitcoin system automatically recalculates the mining difficulty for the next 2016 blocks based on the recent block generation speed.

Simply put, if the recent block generation speed is slower than 10 minutes, the system will automatically increase the mining difficulty; if the block generation speed is faster than 10 minutes, the system will automatically decrease the difficulty. Recently, due to the halving of Bitcoin block rewards, many miners have lost profitability and exited, leading to a decrease in the overall network hashrate and delaying Bitcoin's block generation time. According to data from bitinfocharts, the Bitcoin block time was once delayed to 14 minutes.

This difficulty adjustment has decreased by approximately 6%, marking the 16th largest drop in Bitcoin's history. The next difficulty adjustment is expected to occur within the next 15 days.

Rainy Season Expected to Boost Hashrate Again

Another key indicator of Bitcoin mining competition is the hashrate or the overall network computational power. This value has dropped from 125 EH/s to 90 EH/s after the halving, a decrease of approximately 25%. The main reason is that miners operating older models of mining machines are no longer profitable after the halving. Thomas Heller, Global Business Director of F2Pool, stated in an interview:

"The decrease in hashrate largely comes from miners in China using older mining machines. However, miners globally have been equally affected."

Alejandro De La Torre, Vice President of Poolin, echoed Thomas Heller's remarks, stating that about 30% of miners have stopped mining. Before the Bitcoin halving, these miners were barely profitable, but with the block rewards reduced by 50%, they have no profit margin and are forced to shut down their machines.

However, with the peak season for hydropower in China expected to start around May 25th, cheap electricity costs may prompt many of these older mining machines to come back online. De La Torre noted:

"In the coming months, as the rainy season arrives in Sichuan, China, mining operators will flock to the region, which will increase Bitcoin's overall network hashrate in the medium term."

Thomas Heller also believes that assuming Bitcoin's price remains stable, he expects the overall network hashrate to increase in the next few weeks.

Source