The Biggest Downward Bitcoin Difficulty Adjustment Has Occurred – Everything Is Working As Planned.
The biggest downward adjustment in the mining difficulty on the Bitcoin network has just taken place. The difficulty has dropped by -27.94%. Nothing surprising here, since this was expected for a little over 2,016 blocks, i.e. since the previous adjustment.
As you know, the mining difficulty on the Bitcoin network is adjusted every 2,016 blocks mined. This adjustment is automated. It is written into the source code of the Bitcoin network and therefore does not depend on any arbitrary decision by a human.
No one can stop it. In this sense, what has just happened confirms, as always, that the Bitcoin system works perfectly as expected. It is this kind of guarantee that Bitcoin gives you that changes everything for you as an individual placing the fruits of your labor into the network.
This adjustment is the logical consequence of China's ban on Bitcoin
From a historical perspective, this is only the third time in the history of Bitcoin that we have seen 3 or more consecutive downward adjustments.
This represents a 42.6% drop from the All-Time High (ATH) reached at the end of May 2021:
The reason behind this drop in the difficulty of mining on the Bitcoin network is to be found on the side of the significant drop in the Hash Rate of Bitcoin of course.
The latter is due to the decision taken by China to apply a strict ban on Bitcoin on its territory since the beginning of May 2021. The Chinese authorities aim to promote the digital yuan, and for this, it is necessary to make room.
The Hash Rate of Bitcoin has reached its lowest level since the end of 2019:
Nothing to be alarmed about, however, if you take a step back. Bitcoin remains the most secure decentralized network in the world. That's even good news if you can take a long-term view of things.
Bitcoin continues to work as expected, and all this will end two FUD arguments against Bitcoin
For several years, Bitcoin's opponents have taken great pleasure in attacking Bitcoin for its centralized hashing power. For them, the fact that more than 50% of Bitcoin's Hash Rate is located in China was something dangerous for Bitcoin.
It also allowed them to attack Bitcoin for its environmental impact. This is what Elon Musk did in May 2021 when he probably took the opportunity to manipulate the price of Bitcoin to his advantage. The future will tell us if this vision is true.
In the meantime, since the beginning of June 2021, we have been witnessing the great exodus of Bitcoin mining from China to the West.
All the companies that were mining in China are moving their equipment elsewhere in the world. In the coming weeks and months, all of this equipment will be back on the Bitcoin network. It's just a matter of time.
The advantage here is that these companies will move to countries with more property-friendly jurisdictions, which will avoid such inconveniences in the future.
Bitcoin's share of electricity from renewables now reaches 55 percent
Besides, this is an opportunity for many miners who will seek to maximize the use of renewable energy for their mining operations. This will obviously solve another frequently used FUD (Fear, Uncertainty, and Doubt) argument.
The Bitcoin Mining Council has just published a report estimating that the share of electricity from renewable energies has now reached 55%. This would be well above the 50% threshold set by Elon Musk for Tesla to support payment in BTC.
We will see how the whimsical Elon Musk will react to this fact in the days and weeks to come. For now, he says he is waiting to be sure that this figure remains sustainable over time.
Either way, this is something extremely bullish for the future of Bitcoin. This won't necessarily be reflected immediately in its price, which could continue to move sideways in the weeks to come. Nevertheless, the effects will be massive by the end of 2021.
As I explained a short while ago, several charts highlight the fact that the big opportunity with Bitcoin is probably now. Those who can take the long view have already grasped this over the past few weeks.
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