Bitcoin is continuing its effort of stabilizing its network activity by adjusting its Bitcoin mining difficulty by 10%, especially after the hash rate reversed its decline in December 2018.
Bitcoin Mining Difficulty was Adjusted Repeatedly in 2018
Statistics available from resources such as Bitcoin Wisdom and Blockchain confirm that the most recent difficulty adjustment of Bitcoin network was up by over 10%. The word “difficulty” in “Bitcoin mining difficulty” refers to the ease with which the mining problems/equations can be solved for validating a transaction block in the Bitcoin blockchain.
Reports say there were 5 downward adjustments in 2018:
- One downward adjustment in July 2018
- One downward adjustment in October 2018
- Another downward adjustment in November 2018
- Two downward adjustments in December 2018
These adjustments were done repeatedly since July for adjusting to the falling Bitcoin price. This was done so that the miners can stay afloat in this falling crypto market. The downward adjustments ensured that lower costs were available to the miners. It helped the miners to participate in the network without having to incur a loss. Such an instance of repeated adjustments within a span of 6 months was unprecedented in the last 7 years.
The largest adjustment was seen on December 3, 2018, when Bitcoin against the US Dollar (BTC/USD) was trading below the strong resistance at US$4,000 and reports were emerging that miners were abandoning the Bitcoin network en masse due to the concerns related to profitability.
Things are Looking Better for Bitcoin Mining
Reduction in Bitcoin mining difficulty has led to a U-turn in and around mid-December 2018. A major scaling solution of Bitcoin is the Lightning Network, which has reached a new record high in terms of both capacities as well as participation.
Bitcoin developer Jimmy Song has highlighted the fact that the decentralized nature of Bitcoin will increase its separated nature from other altcoins in the new year 2019. He went on to say:
“Bitcoin is different because Bitcoin is decentralized. The advantages of decentralization are often subtle and easy to dismiss, but they are real benefits.”
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