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Bitcoin just had the biggest drop in mining difficulties since 2011

November 3, 2020

Bitcoin (BTC) saw the largest negative difficulty adjustment in nearly a decade on November 3rdwhile the network flawlessly takes care of itself.

Data from the monitoring resource showed this Bitcoin’s level of difficulty was automatically adjusted by 16% on Tuesday.

The difficulty decreased the most in nine years

Estimates had previously suggested this The adjustment would be 13%, but in this case it was the second highest in Bitcoin’s history. Only in 2011 was there a larger difference of 18% at the end of October.

Bitcoin difficulty level with the last drop highlighted. Source: Glassnode / Twitter
Bitcoin just had the biggest drop in mining difficulties since 2011
Bitcoin just had the biggest drop in mining difficulties since 2011

Difficulty adjustments are made automatically every 2016 blocksand allow Bitcoin to remain “hard” money regardless of external factors affecting miners.

Such a reduction should encourage more mining participants to compete for the rewards of block subsidies.with the result that the difficulty begins to increase again.

At the time of going to press Estimates suggest that the next adjustment will be another -16%This suggests that the effects of the event are not yet being felt on Tuesday.

For users, the downward correction reduces the fees and blocking times as well as the size of the unsettled transactions in the Bitcoin mempool. estimates that the optimal Bitcoin transaction rate is still high: 80,000 Satoshis ($ 11).

2-month size chart for Bitcoin mempools. Source: Blockchain

The price of BTC is not affected

Instead, the commentators reacted slightly annoyed praised Satoshi Nakamoto’s design for protecting the integrity of the network and resources.

“”There is no nicer aspect of #Bitcoin than the difficulty level. Just a great mechanism design, “he summarized on Twitter Travis sound, Founder of the asset manager Ikigai.

Meanwhile, The network’s hash rate appeared to have spun 180 degrees on TuesdayThe estimated weekly averages are starting to move upwards.

The hash rate gives an overview of how much computing power is used to validate Bitcoin transactions.. Weeks ago the metric was at an all-time high, but lost about 25% in the second half of October.

At the time of going to press, little impact on Bitcoin’s price development was notedThe remaining $ 13,000-13,300 as support and the BTC / USD is hovering around $ 13,500.