After posting solid gains in January, a key measure of competition among bitcoin miners has stagnated in the past two weeks as the coronavirus outbreak disrupts economic activity in China.
The slowdown in the growth of so-called mining difficulty signals miners have had to pause upgrading equipment after the epidemic prompted Chinese authorities to impose a quarantine and major mining equipment makers delayed production and shipments.
Mining difficulty – which gauges the effort required to solve math problems in order to win newly created bitcoin – adjusted on Feb. 11 to a level 0.52 percent higher than 14 days earlier, data show. That’s a significant drop from the growth rates of 4.67 and 7.08 percent, recorded on Jan. 28 and 14, respectively.
Bitcoin is designed for the difficulty to adjust roughly every two weeks, depending on the amount of computing power connected to the network. When more miners join the race to earn newly created bitcoin, the difficulty rises; when miners drop out, the measure eases.
Before the slowdown, miners were bracing for a new reality: their industry was about to become fundamentally less profitable. In May, mining rewards are expected to be cut in half, to around 6.25 bitcoin ($64,000 at current prices) per block, every 10 minutes or so. This would be the third so-called halving in bitcoin’s history and could result in operating costs exceeding revenue at miners. Read More...