In the last adjustment, mining difficulty fell by 5.43% – the largest decrease in the last eighteen months. It happened three weeks after bitcoin halving and immediately after the hack of Bitfinex.

The sudden drop of bitcoin mining difficulty from 213.5 to 201.9 billion happened on 2 August and went almost unnoticed because on the same day Bitfinex, the third most popular cryptocurrency exchange, suspended its services after a hacker attack. 120,000 BTC were reported as stolen, leading to a dramatic fall in the price of bitcoin. However, the adjustment in the difficulty has probably nothing to do with the hack of Bitfinex because it results from two weeks of bitcoin mining.

Since 27 January 2015, when the difficulty fell 6.14%, it has never decreased so abruptly. In total, it grew almost fivefold in the next one and a half year, from 41.2 billion to 213.4 billion on 4 July. However, the situation has recently changed, as demonstrated by the two adjustments that took place after the bitcoin halving on 9 July. In the first, the difficulty grew by the modest 0.04%, and in the second and the most recent one, it dropped. These changes may reflect the number of miners who leave the business that suddenly became unprofitable.

The previous two decreases in the mining difficulty, in March and June 2016, were respectively caused by the bitcoin scaling crisis and the demise of a number of mining companies including KnCMiner on the eve of the halving.


Alexey Tereshchenko