Preceding the period when China initiated a crackdown on Bitcoin mining, the mining difficulty of the cryptocurrency has slightly reduced. The hashrate of BTC dropped significantly according to on-chain metrics and decreased to 21.05 Trillion at a 685,440 block height. This data indicates an almost 16% decline in mining difficulty in comparison to the May 13 all-time high.
Bitcoin mining difficulty is a scale of the blockchain security and the struggle it takes to vie for block rewards. The mining difficulty of BTC is expected to modify itself after the mining of 2,016 blocks depending on the average block production within that time.
A faster average interval, that is below 10 minutes for a block production automatically increases the difficulty while a slower interval, which is above 10 minutes will triggers a decrease in the block production difficulty.
The BTC average block production interval surged to 11.8 minutes between May 13 and May 21 within a period the Chinese government stated the need to crackdown on Bitcoin mining.
According to analysis, the interval was over 18 percent swifter than the expected 10 minutes per block time frame. The average hashrate from May 13 sled down to 147 exhashes per second (EH/s) and has remained relatively stable even after China made the comments to ban Bitcoin mining.
Chinese Miners Seeks to Migrate to Sichuan
Due to the governmental crackdown, some Chinese miners are making moves to migrate to the hub of hydro-electricity in Sichuan from the Northern Chinese Provinces. However, owing to the poor rainfall, the power plants in Sichuan have been reducing the energy it releases to high-power consumption industries like BTC miners.
It is yet unknown how the government of Sichuan will respond to the mining crackdown. The Sichuan government is planning a seminar to examine the impact of the crackdown on the hydro-electric economy. This however isn’t stopping some Chinese miners from seeking to relocate their equipment outside the country to avoid further regulations.