Bitcoin’s difficulty has stabilized after a few months in which the difficulty rate declined in December. According to data provided by Bitcoin Wisdom, it is possible to see that the network’s difficulty experienced a substantial drop in November and December. Now, it has just adjusted upwards for the first time in a few months after a rough crypto market 2018.
Since August until the beginning of December, Bitcoin’s hash rate has been falling. Bitcoin (BTC) price fell to new year lows, something that affected the whole network. Miners were not able to keep mining with the same difficulty since it was not profitable. This is why several mining rigs have been disconnected and other miners shut down their operations.
Bitcoin’s network has a mechanism that automatically adjusts the difficulty rate of the equations that miners must solve to validate transactions. This difficulty increase shows that the mining industry was starting to recover after a downward adjustment in the difficulty rate between November and December.
The difficulty rate has been increasing during the whole 2018. The largest difficulty increase was registered on January 25, when it grew 16.84%. November and December concentrated 60% of all the downwards difficulty adjustments. The largest adjustment was registered on December 3rd, reducing the difficulty 15.13%. On December 31st, Bitcoin’s difficulty increased by 10.03%, the largest increase since July 29, 2018.
The investor and crypto entrepreneur Alistair Milne commented on Twitter about this difficulty increase. He made a reference to those saying that Bitcoin’s network was going to lose most of its miners due to the price decrease. However, the bitcoin mining network has just adjusted upwards and the hash rate seems to be recovering after a retrace of 50% since its all-time high in August 2018.
Remember the Bitcoin mining death spiral FUD? Mining difficulty just adjusted +10% pic.twitter.com/aAhENjWGFS
— Alistair Milne (@alistairmilne) December 31, 2018
Although there are not so many experts predicting a bull run in the short term, Bitcoin has proved to be behaving very positively in terms of fundamentals. There have been important improvements in the Lightning Network (LN) or an increase in the number of addresses registered.