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Bitcoin Mining Activity Expected to Surge as Chinese Hardware Makers Shake Off Coronavirus Slowdown

Following a 0.38% dip in late February, the bitcoin mining difficulty rate is expected to bounce back by more than 5% on March 10 as a coronavirus-triggered hardware delivery slowdown abates.

The bitcoin mining difficulty is adjusted roughly every two weeks, benchmarking the computing power needed to find one new block. The difficulty decreased for the first time in 2020 during its last adjustment on February 25, partly due to a government quarantine against the coronavirus in China that led to mining delivery delays.

Despite that drop, however, the hash rate for the trailing seven days has posted strong performance, and on the last day of February hit 136 EH/s, an all-time high. The total network difficulty is now estimated to jump by 5% on March 10.

As previously reported, even at the time when growth in the difficulty rate slowed, market participants still anticipated that the rate would shoot up very soon once the outbreak's impact on hardware shipping subsided.

This prediction came about because many miners had already placed large orders for new mining rigs to gear up ahead of bitcoin's block reward halving in May, when the per-block reward will fall from 12.5 BTC to 6.25 BTC. However, government quarantines forced all major mining equipment makers in China to temporarily shut down, delaying production and shipments of mining machines.

The Chinese government has loosened the nationwide quarantine since mid-February and, to spur economic activity, has urged businesses to resume normal operations. Bitcoin mining equipment maker Canaan started partial operations on February 10, while Bitmain also resumed shipping and production in mid-February.

"We got back to work as soon as the Shenzhen municipal government said we can resume work. There was no delay," a Bitmain employee told The Block.

In a notice published on February 25, MicroBT, the manufacturer of Whatsminer, said it resumed its maintenance services. Read More...