Bitcoin Difficulty Set For Another 3% Drop: What It Means

On-chain data shows the Bitcoin mining Difficulty is headed for another 3% drop this weekend. Here’s what this could mean for the network.

The indicator’s value automatically changes about every two weeks during regular network adjustments. Whether the Difficulty goes up or down comes down to the conditions on the blockchain since the last adjustment.

Satoshi wrote in a simple rule for the network to follow: keep block time consistent at 10 minutes per block. When miners go through blocks at an average pace faster than this, the chain responds by upping its Difficulty. Similarly, it drops the metric instead if the validators are slower than needed.

The next Difficulty adjustment will occur during Friday night. Below are the details related to this event.

As is visible above, the average block time on the Bitcoin network has been 10.30 minutes since the last adjustment. This is 0.30 minutes slower than the blockchain wants, so it will ease up the Difficulty by about 2.91% to bring miners back up to speed.

This will be the second consecutive adjustment to lead to a decline in the Difficulty.

While the Hashrate did manage to hold up through the drawdown itself, it would appear that the Bitcoin price remaining depressed recently has finally made some of these validators pull out their computing power.

At the time of writing, Bitcoin is floating around $78,600, up 2.7% in the last 24 hours.