On March 25, Bitcoin mining difficulty will experience the biggest adjustment in recent years, and is expected to drop by 13%

Over the past few weeks, Bitcoin has experienced one of the most severe declines in history due to the spread of the new coronavirus and the resulting financial turmoil. The sharp drop in prices has forced miners to shut down some of their outdated Bitcoin mining equipment to reduce costs.

However, the situation also demonstrates the ingenious design of the Bitcoin network and its ability to self-heal. The largest Bitcoin mining difficulty adjustment in recent years is scheduled for March 25, which could offset some of the impact of the decline in Bitcoin mining profitability due to the price drop.

10% to 15% Bitcoin mining difficulty reduction to begin on March 25

According to BTC.com, the next difficulty adjustment is expected on March 25, which will reduce the difficulty by more than 10%. This is one of the top three largest difficulty adjustments in Bitcoin's 11-year history. In addition, according to TokenAnalyst's findings, based on a 10-minute block generation time estimate, the number of Bitcoin blocks mined between March 10 and 20 decreased from the expected 19,800 to 16,550.

This is a further demonstration of the network’s self-healing capabilities. Although the global economic collapse caused the Bitcoin price to plummet on March 12, the network is designed to adapt to changing circumstances.

Reducing the difficulty of Bitcoin mining means that it is easier for miners to mine Bitcoin and get rewards. Therefore, the mining difficulty adjustment directly reflects the profitability of miners, making it still profitable to mine Bitcoin.

Because Bitcoin is self-regulating and autonomous, the Bitcoin mining difficulty adjustment scheduled in less than four days from now will reduce the network’s mining difficulty level by as much as 13% to 15%.

It is also worth noting that the mining difficulty adjustment is absolutely free from external interference and is a dynamic event hard-coded in Bitcoin. Currently, traditional capital markets are also suffering, but they have received huge help from the government, which is doing everything possible to reduce losses. But Bitcoin has not received any compensation measures, and it still operates as expected. The difficulty of Bitcoin mining keeps the block generation time at 10 minutes, making the network sufficiently decentralized because other miners around the world can run nodes synchronously, confirming that transactions are stable and protecting network security.

If the Bitcoin mining difficulty is too high and there is not enough computing power (hash rate) in the network, it will take longer to process transactions.

Efficient and farsighted miners benefit the most

The reduced difficulty of Bitcoin mining also has other effects. The rewards previously obtained by inefficient Bitcoin miners will be distributed to those efficient Bitcoin miners that survive. The computing power currently launched on the Bitcoin network is Antminer S9 and older models, while those better mining machines S17, M20S remain in the Bitcoin network, which restores "healthy profits" for the most efficient and far-sighted miners, allowing the Bitcoin system to survive and develop. The Bitcoin network has strict codes and survival rules.

Experts believe that it is these principles that "drive the trading system in which Bitcoin can maintain a stable operation - without any bailouts, without central bank money printing, and without irresponsible panic economic intervention." (Caiyun Blockchain)