According to the CNBC experts, bitcoin mining has become more complex due to the algorithm self-correction. Every 2016 blocks, or about every two weeks, bitcoin resets its algorithm. Mining difficulty (hashrate) depends on the computing capacity used in the system. On Friday, August 13, the bitcoin code automatically made it about 7.3% more difficult to solve a block. Experts think that this spike is not surprising as the system is regaining its computing power that it lost in May 2021. Notably, China’s government banned cryptocurrency mining that month. According to Jason Deane, an analyst at crypto advisory firm Quantum Economics, “hashrate levels are still down 42.1% from the peak in May 2021 when the China exodus happened.” In May 2021, China had 54% of the world's mining power, but the government decided to kill cryptocurrency mining stone-dead. However, this shutdown did not affect the network. The bitcoin algorithm corrected this deviation and managed to bring itself to the normal state. In July 2021, the BTC network experienced an unprecedented 28% drop in the difficulty level. “We have seen the bottom of the hashrate decline, and it is nothing but up from here,” Mike Colyer, CEO of digital currency company Foundry, said. “This next adjustment reflects the fact that miners are building out capacity and plugging in new machines,” Coyler added. The mining insiders say that most of the old-generation equipment will never be used for mining again. New equipment has more potential for mining and more hashrate. It means that the network may become more productive due to a higher level of competition among miners. Experts believe that this will return the hashrate to its peak levels in the next 12 months.
