The algorithm for Bitcoin has been updated in response to China’s crackdown, making it easier than ever for crypto miners keep their productivity intact.
The adjustment was in effect on Saturday. This ensured that online miners of bitcoin received more cash.
CNBC quoted a Bitcoin mining engineer saying that they could now earn more cryptocurrency each day.
Brandon Arvanaghi, a Bitcoin mining engineer, said that “this will be a revenue party to miners.”
Experts say miners will see more revenue and significant increases in profits if there are fewer competitors after the crackdown.
How is Bitcoin mined
To mine a Bitcoin, the user must solve a puzzle. This is done by running a program on a computer first. The digital ledger keeps track of all Bitcoin transactions and is updated when a block is completed.
China crackdown has an effect
China was a long-standing hub for Bitcoin mining. According to past estimates, 65 to 75 percent world’s mining took place there.
China pledged in May to clamp down on Bitcoin mining and trading, as part of its financial risk management measures.
The authorities in Sichuan, a southwest province, ordered that all Bitcoin mining projects be stopped on June 18.
“Crackdown against Chinese miners may mean that they are offloading coins into a thin marketplace and taking us lower,” stated Ben Sebley, a London-based crypto firm BCB Group.
CNBC quoted a Chinese Bitcoin miner saying that mining was shut down in a specific geographic area for the first time ever in network history. This affected more than half of the network.
This resulted in a drop in more than 50 percent in the hashrate, which is the collective computing power used by miners around the world. It was at its peak in May.
Today, fewer people mine Bitcoins which means that less blocks are solved every day. Although it takes around 10 minutes to complete one block, Darin Feinstein, a Chinese miner, claims that the Bitcoin network now takes 14 to 19 minutes to complete each block.
This is why Bitcoin re-calibrates approximately every two weeks or every 2,016 block, making it difficult for miners.
On Saturday, however, Bitcoin code made it 28 percent easier to mine Bitcoins – a historic drop. This restored block times to the 10-minute window.
A chief executive officer at a digital currency company stated that the Bitcoin algorithm was programmed to deal with an increase or decrease of mining machines.
All Bitcoin miners have the same economics.
Kevin Zhang, the former Chief Mining Officer of Greenridge Generation, was the first US power plant to start mining behind the meter on a large scale. He said that assuming fixed power costs the Bitmain miners were earning $29 per day compared to $22 the day before. Zhang noted that mining revenue has fallen only 17 percent since the peak bitcoin price in April, but crypto’s value has fallen by half.