Xinjiang’s Miner Shutdown Causes 5% Reduction in Bitcoin Mining Difficulty
Following a recent decline in hash rate, bitcoin’s mining difficulty has also reduced by about 5.4% as of yesterday night. The mining difficulty helps the bitcoin network to keep producing bitcoin at an even rate regardless of fluctuations in the hash rate.
The network hardens or softens the mining process every fortnight to achieve a balance with the hash rate. This hash rate has remained stable since May 30 (the last difficulty adjustment date), but it has been on a decline by an average of 20% since June 9. That was the date authorities in Xinjiang’s Zhundong economic and technology development zone asked miners to shut down their activities following the decision of the china state council to ensure stricter regulation on the cryptocurrency industry especially bitcoin mining activities and trading.
From May 30 to June 9, the average bitcoin block production interval was 9.8 minutes, which is approximately the standard 10 minutes per block rate. However, the hash rate decline has caused bitcoin’s average block production interval to exceed 12 minutes.
This difficulty decline would be good news for miners who are yet to shut operations as they will have more share of the total block subsidies over the next fourteen days. In a related development, bitcoin price is now about $40,000 after surging past $39,300 in the last 24 hours.
Bitcoin Price Surge
Around UTC nighttime yesterday, there was a noticeable bitcoin price breakout which was a result of Elon Musk’s tweet denying any role in the price movement of the crypto market in recent times.
Musk tweeted, “Tesla sold about 10% of its holdings as proof of bitcoin liquidation without any involvement in the market. Tesla would allow bitcoin payments for its cars immediately miners confirm using at least 50% clean energy for their bitcoin mining.”
Within a few hours after the tesla founder’s tweet, the bitcoin price rose by about $1,600. This would be Musk’s first response regarding bitcoin since he tweeted that his company will no longer accept bitcoin as a payment option for tesla vehicles due to environmental considerations.
Yunnan Inspects Bitcoin Mining Farms
While most China regions are issuing a blanket ban on bitcoin and bitcoin mining operations, the Yunnan province through its energy bureau is seeking additional departments to inspect and shut down or modify bitcoin mining farms guilty of using hydroelectricity illegally.
Even power stations providing energy to bitcoin mining farms aren’t spared unless they have been offering proper remittances to the government purse.
This practice is common but illegal in Yunnan and Sichuan. Some power stations do route their hydroelectricity supply through the energy grid (to avoid paying the authorities their due compensation) but still provide energy for bitcoin mining farms.
No one knows the decision the Yunnan energy bureau would take after it inspects all illegal energy supply to bitcoin mining farms by power stations. While Yunnan and Sichuan are the only hydro-electricity-powered bitcoin mining provinces, none of them is yet to ban bitcoin mining operations outrightly.
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