The Bitcoin Price Has Suddenly Soared After Huge China Crackdown Earthquake
After losing ground for the past week , Bitcoin has suddenly risen in the wake of the largest ever so-called “difficultly adjustment” to its bitcoin network.
After the two-weekly calibration of bitcoin networks, which saw computing requirements drop by 28%, bitcoin prices rose almost 5%
This huge drop in bitcoin usage, which dwarfs the 18% record set in October 2011, was due to China’s crackdown against crypto mining and bitcoin. Last month, high-powered computer users were forced out of China by authorities to protect the bitcoin network and verify transactions.
The hash rate of bitcoin, which measures how much computing power is directed at the bitcoin network by determining its location, fell to 13 months after the Chinese expelled bitcoin and other crypto miners. The difficulty adjustment this morning brought the network back to par with the hashrate.
Bitcoin miners all over the globe are expected to become more profitable as their machines can ‘find’ more bitcoin at a lower cost. The cost of running bitcoin mining machines, which are often gathered together in large mining farms, varies depending on the electricity price. Some claim to be able mint new bitcoin tokens at an average price $3,000 per Bitcoin.
However, the decrease in bitcoin’s hashpower and subsequent difficulty adjustment are not expected to last.
Alex de Vries, an economist, bitcoin analyst, runs Digitalconomist. He has also created a popular index for bitcoin energy consumption, which he speaks over the phone. “These miners are moving elsewhere, and you want to get the idle machines back online as soon possible, if you’re an miner.”