Bitcoin Records Biggest Mining Difficulty Drop Since 2011, What Does This Mean?

Such a huge negative adjustment could mean a lack of confidence in the Bitcoin network or that the current price is cheap, but conversely, it could also indicate that better times are around the corner.
Bitcoin’s mining difficulty has seen its biggest drop since 2011, with a drop of about 16% according to data from Glassnode, marking the largest negative adjustment since the introduction of ASICs.
Bitcoin mining difficulty hits all-time high In short, Bitcoin mining difficulty is a self-adjusting measure designed to maintain balanced block production. The Bitcoin network should normally produce a block every 10 minutes, but the hash rate can sometimes affect the average.
Therefore, Bitcoin adjusts the complexity of mining calculations every two weeks (or every 2016 blocks). If the network takes more than 14 days to produce 2016 blocks, the mining difficulty will be adjusted downward, and conversely, if it takes less time, the difficulty will increase.
According to BTC.com, on Tuesday, Bitcoin’s mining difficulty dropped from 19 trillion to about 16 trillion, a -16% adjustment, the second-highest negative adjustment in Bitcoin’s history.
The last major difficulty adjustment was nine years ago in October 2011, when it was reduced by about -18%.
The drop in mining difficulty coincided with the migration of some miners in Sichuan, who shut down some machines that were not producing value as the rainy season ended in the region. It could be argued that such a large negative adjustment means a lack of confidence in the Bitcoin network or that the current price is low, but conversely, it also indicates that better times are coming.

What does the sharp drop in Bitcoin mining difficulty mean?
With the Bitcoin price having risen sharply in recent months, the hashing power required to produce new Bitcoins has now dropped dramatically, and miners' profitability will increase significantly. In other words, between now and the next adjustment on November 15, 2020, mining will become extremely profitable even for inefficient miners.
For Bitcoin users, the negative adjustment means reduced transaction fees and reduced transaction times. It is worth noting that over the past few months, Bitcoin transaction fees have risen in tandem with the asset's price. When the number of miners available to process transactions is insufficient to complete all the transactions that users want to process, Bitcoin transfer fees soar. Data compiled by BitInfoCharts shows that the average transaction fee is currently over $12, which is on the expensive side.
However, by lowering the difficulty, more miners may take advantage of the opportunity, clearing the Bitcoin mempool backlog and reducing high fees.
Meanwhile, Bitcoin’s price does not appear to have been affected by the massive negative adjustment in mining difficulty, with Bitcoin currently trading largely unchanged at $13,794.30 over the past 24 hours. (Blockchain Knight)