Bitcoin Mining Difficulty Continues To Sink

New reports out today highlight that the difficulty of mining blocks on the Bitcoin network has sunk by more than 7% as a result of recent market movements. Overall, difficulty is still high in the grand scheme of things, but I guess this does suggest that one day, the profitability of mining on the Bitcoin blockchain might eventually improve.

The markets continue to move in a positive direction through the end of this week in what looks to be the first cryptocurrency market surge that we have seen for a number of months. At the time of writing, Bitcoin is valued at $4,091.66, up 3.68%, XRP is valued at $0.37, up 0.58% and Ethereum is valued at $116.41, up 9.03%.

The big performer of the week however is Bitcoin Cash ABC, which at the time of writing is valued at $218.21, up 46.85% from yesterday, and up from a value of $87.83, as recorded earlier this week.

According to CCN:

“In the light of the Bitcoin blockchain reduced hashrate caused by withdrawing miners, the network is designed to automatically adjust the difficulty level in order to avoid a situation where there is a huge transaction confirmation backlog and high confirmation fees. The 7 percent drop in difficulty is likely to be the start of a similar difficulty readjustment pattern as Bitcoin below $6,000 increasingly becomes a prolonged reality.”

Through 2018, the value of Bitcoin has sunk significantly and with this so has the profitability of mining Bitcoin. Tied in with the fact that the cost of Bitcoin mining equipment has shot up, along with the bills for the energy powered to mine Bitcoin and the general consensus is that one day, Bitcoin mining could become a pointless activity, since it will cost more to mine than the potential returns.

This in turn, threatens cryptocurrency adoption on a larger scale:

“The real danger however lies in the fact that the existing situation can in itself become an obstacle to mass cryptocurrency adoption in the long term if low prices persist. The wider cryptocurrency market has a well-documented history of tracking bitcoin’s moves closely, which means that a perceived reduction of interest in mining bitcoin will eventually lead to an exodus of miners from cryptocurrency altogether which could at least theoretically jeopardise the security of cryptocurrencies.”

This is something to keep your eyes on over the coming days, especially as the markets seem to be entering a very volatile phase. Even if you’re not interested in mining as such, this could still eventually have implications for the value of your own Bitcoin portfolio, so switch on and stay tuned!