Coinbase CEO Brian Armstrong pushed back on Sunday against fears that miners defecting to artificial intelligence (AI) threaten bitcoin, arguing the network’s built-in difficulty adjustment keeps blocks flowing no matter how much hash power leaves.
Key Takeaways
Brian Armstrong said July 20 that hash power leaving Bitcoin doesn’t set its price, citing the currency’s difficulty adjustment as his core argument. Bitcoin’s difficulty fell 5% to 127.17 trillion on July 11 after hashrate dropped 7.9% to 908 EH/s in ten days.Armstrong called $60,000 the bottom in June; 56.3% of roughly 27,000 poll respondents disagreed on July 14.“Interesting point. The first one feels temporary. The second one more durable,” Armstrong began, before rejecting the conclusion, writing:
The exchange arrives at a sensitive moment for the mining industry, given that analysts have described miners as abandoning the network for AI and high-performance computing contracts, repurposing power and cooling infrastructure originally built for mining rigs.
How the Difficulty Reset WorksIn other words, the system absorbed the exodus exactly as designed, i.e. fewer machines, easier math, steadier economics for the miners who stayed. What the adjustment cannot do, Armstrong’s critics might note, is manufacture demand, which is why he argues price is determined elsewhere.
His own audience is not fully convinced because when Armstrong asked followers on July 14 whether the bottom was in, 56.3% of roughly 27,000 respondents said no. In any case, the next difficulty adjustment, due within days, will offer a fresh reading on whether the miner exodus is stabilizing and whether Armstrong’s $60,000 line survives the test.
