Bitcoin mining has become competitive than ever.
Bitcoin mining difficulty – the measure of how hard it is to earn
mining rewards in the world’s largest cryptocurrency by market cap – has
reached a new record high above 7.93 trillion. That’s a seven percent
jump from the 7.45 trillion record set during the recent two-week
adjustment cycle, which was the highest since October 2018.
Bitcoin is designed to adjust its mining difficulty every 2,016
blocks (approximately 14 days), based on the amount of computing power
deployed to the network. This is done to ensure the block production
interval at the next period will remain constant at around every 10
minutes. When there are fewer machines racing to solve math problems to
earn the next payout of newly created bitcoin, difficulty falls; when
there are more computers in the game, it rises.
Data from BTC.comRight now the machines are humming furiously. Bitcoin
miners across the world have been performing calculations at an average
56.77 quintillion hashes per second (EH/s) over the last 14 days to
compete for mining rewards on the world’s first blockchain, according to
data from mining pool BTC.com.
BTC.com data further
indicates the average bitcoin mining hash rate in the last 24-hour and
three-day periods were 59.58 EH/s and 59.70 EH/s, respectively, even
higher than the average 56.77 EH/s from May 15 to June 27, or any 14-day
data in the network’s history.
Similarly, data from blockchain.info also
shows the aggregate of bitcoin computing power was around 66 EH/s as of
June 22, surpassing last year’s record high of 61.86 EH/s tracked by
the site, and has more than doubled since December 2018 when the hash
rate dropped to as low as 31 EH/s amid bitcoin’s price fall.
Assuming all such additional
computing power has come from more widely used equipment such as the
AntMiner S9, which performs calculations at an average rate of 14 tera
hashes per second (TH/s), that suggests more than 2 million units of
mining equipment may have been switched on over the past several months.
(1 EH/s equals to 1 million TH/s)
The increase in capacity is also in line with bitcoin’s price jump over the first half of 2019, which caused the price of second-hand mining equipment to double in China, and also juiced demand for new machines.
BTC.com further estimates the bitcoin mining difficulty will jump by
another seven percent at the beginning of the next adjustment cycle,
which would be the first time for bitcoin mining difficulty to cross the
eight trillion threshold.
Delayed plugging in
Such computing interest comes at a
time when mining farms in China, especially in the country’s mountainous
southwest, have been gradually plugging in equipment as the rainy
summer approaches.
According to a report published
by blockchain research firm Coinshare, as of earlier this month, 50
percent of the global bitcoin computing power was located in China’s
Sichuan province.
However, it’s important to note that this year, the arrival of the
rainy season in China’s southwest has been delayed by nearly a month
compared to previous years. As a result, some local mining farms were
only running less than half of their total capacity in the past month.
Xun Zheng, CEO of mining farm operator Hashage based in Chengdu that
owns several facilities across China’s southwestern provinces, said
there had been no rain in the area for over 20 days since early May,
which was “unusual.”
“In the past years, it usually starts raining continuously throughout
May so [hydropower plants] normally will have enough water resources by
early June,” he said.
As a result, in early June his firm was only operating at 40 percent
of capacity; it can host more than 200,000 ASIC miners. But as the rain
has arrived gradually over the past two weeks, the proportion has
climbed to over 60 percent.
Mining farms in China previously estimated
that the total hash rate this year during the peak of the rainy season
around August could break the threshold of 70EH/s. That means another
300,000 units of mining machines could be further activated, assuming
all are AntMiner S9s or similar models.
Those waiting to be switched on will
also include new capital in the sector such as Shanghai-based
Fundamental Labs, a blockchain fund that has invested $44 million on top-of-the-line mining equipment, which will be activated in June.
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