Bitcoin mining has never been easier since China’s crackdown - miners stand to make higher profits

The level of difficulty for mining bitcoin plunged by 28 per cent on Saturday, according to data from BTC.com, to mark the largest drop in the network’s history

The most noticeable effect of China’s anti-mining efforts may be the acceleration of bitcoin mining outside the country, said cryptocurrency trader Scott Melker

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The level of difficulty for mining bitcoin plunged by 28 per cent, marking the largest drop in the network’s history. Photo: Reuters

Published: 2:02am, 6 Jul 2021Updated: 2:29am, 6 Jul 2021

Bitcoin mining has become easier and more profitable, as the pool of miners competing to create tokens shrinks following China’s strict crackdown on the country's cryptocurrency operations.

The level of difficulty for mining bitcoin plunged by 28 per cent on Saturday, according to blockchain data service BTC.com, to mark the largest drop in the network's history.

Bitcoin’s hash rate, which reflects the computation power needed to validate tokens, is automatically adjusted by the network's algorithm every two weeks to make sure that miner productivity is balanced.

The recalibration on Saturday made it almost 30 per cent less difficult for mining systems to complete blocks to create the cryptocurrency, so a lot more cash may be going to the miners who remain online.

Cryptocurrency trader Scott Melker said in a tweet on Monday that his daily mining revenue jumped 50 per cent after the difficulty adjustment.

“The price of #Bitcoin dropped over 50 per cent in a matter of weeks and China banned mining, which accounted for roughly 60 per cent of the hashrate … and the network is unaffected,” the “Wolf of All Streets” trader said. “No bailouts, assistance from a government or manipulation required. Just the free market being free.”