Bitcoin mining difficulty drops as miners capitulate
The difficulty of mining bitcoin has dropped at the fastest pace since 2021, indicating growing challenges for miners amid unfavorable market conditions.
According to CoinDesk, bitcoin miners' revenue per petahash has fallen by about half - from a peak of $70 to $35. This is due to the decline in the price of bitcoin and high electricity and equipment costs.
Many miners are forced to scale down or shut down their operations. For example, the large mining company Core Scientific filed for bankruptcy in December 2022. Other market players, such as Argo Blockchain and Marathon Digital, are also experiencing financial difficulties.
The drop in bitcoin mining difficulty is a sign that some miners are forced to surrender under the pressure of unfavorable market conditions. This may lead to further consolidation in the industry and the exit of less efficient players.
In the long term, this may contribute to greater centralization of the bitcoin network in the hands of large mining pools and companies, which calls into question one of the key advantages of cryptocurrencies - their decentralized nature. Nevertheless, sustainable and efficient miners are likely to be able to weather the current difficulties and even strengthen their positions.