The Bitcoin network recorded an extraordinary event when mining difficulty dropped by more than 11%, the biggest drop since China banned crypto mining activities in 2021.
At the time of writing, the price of Bitcoin was at $70,390, down 0.05% since it opened in early trading Monday in the Asian session.
Mining difficulty is a measure of how difficult it is for miners to add new blocks to the Bitcoin chain.
This large drop indicates a decline in global computing power (hashrate), thus indicating that many miners were forced to temporarily suspend operations.
One of the main causes was Winter Storm Fern, a severe snowstorm that hit 34 states in the United States.
Power outages caused many miners in the country to shut down their machines in order to stabilize the power grid.
In fact, Foundry USA, the world’s largest Bitcoin mining pool, lost nearly 60% of its mining power when the storm hit.
In addition to the weather, the crypto market crash also put a lot of pressure on it.
The sharp drop in Bitcoin prices has reduced miners’ profits, prompting some to shut down operations or move their machines to more profitable artificial intelligence (AI) and high-performance computing data centers.
While mining difficulty is currently at a lower level, this is expected to be temporary.
With the hashrate starting to recover, Bitcoin difficulty is expected to increase again in the upcoming adjustments.
This event proves that despite Bitcoin’s decentralized nature, its network is still affected by weather, the global economy, and the physical realities of the real world.
