Bitcoin difficulty drops by over 11%, in steepest drop since 2021 China ban
Summary
The Bitcoin network experienced a significant mining difficulty drop of 27% during China's 2021 crypto mining ban, highlighting the impact of regulatory changes on cryptocurrency operations. This adjustment underscores the volatility and adaptability of the Bitcoin ecosystem.
Key Insights
What is Bitcoin mining difficulty?
Bitcoin mining difficulty is a measure of how challenging it is to find a new block in the Bitcoin blockchain by solving complex computational puzzles. It adjusts automatically every 2,016 blocks (about two weeks) to maintain an average block time of 10 minutes, increasing if blocks are mined too quickly or decreasing if too slowly.
Why did Bitcoin difficulty drop significantly during China's 2021 mining ban?
China's 2021 crypto mining ban caused a large exodus of miners, sharply reducing the network's total hash rate. This led to blocks being mined slower than the target 10 minutes, triggering an automatic difficulty decrease of nearly 28% in one adjustment—the largest in history—to restore the average block time.
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