LONDON (IT BOLTWISE) – Bitcoin mining difficulty is expected to rise again on December 11, while hash price, a key indicator of miner profitability, is near historic lows. This development presents the industry with new challenges, especially in view of rising energy costs and geopolitical tensions.
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Bitcoin mining difficulty, a measure of the computing power needed to find new blocks, is expected to rise again on December 11th. This adjustment comes as the hash price, which measures miners’ expected profitability per computing unit, remains near historic lows. The hash price is currently around 38.3 petahashes per second (PH/s) per day, which is just above the record low of under 35 PH/s on November 21st. A hash price of 40 PH/s is considered a break-even point for miners at which they must decide whether to shut down their machines or continue operating them.
The latest mining difficulty adjustment, which took place last Thursday, resulted in a decrease in difficulty from 152.2 trillion to 149.3 trillion. This resulted in an average block time of approximately 9.97 minutes, which is slightly below the 10 minute goal. The upcoming adjustment is expected to increase the difficulty to 149.8 trillion, which could further exacerbate challenges for miners.
The mining industry faces a variety of challenges, including regulatory bans or restrictions, rising energy costs and geopolitical tensions between the U.S. and China that could disrupt supply chains for critical equipment. In particular, the US Department of Homeland Security’s investigation into the Chinese mining hardware manufacturer Bitmain is causing uncertainty. Bitmain, the leading manufacturer of application-specific integrated circuits (ASICs) for mining proof-of-work cryptocurrencies, has an 80% market share.
The possibility that the US imposes restrictions, tariffs or sanctions against Bitmain could have a significant impact on the mining industry, which relies heavily on the company’s equipment. These developments could put further pressure on miners’ profitability and impact the future of the industry. Experts warn that rising operating costs and supply chain uncertainties could significantly impact miners’ profitability.
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