The difficulty rebound and hash rate show that miners are back on their road to recovery after the most striking yet brief disruption in history.
On October 4, on-chain analytics provider Glassnode shared insights in its Week on Chain report. It mentioned that the Bitcoin hash rate has significantly recovered. Even though its hashing power went offline by 50% in May after China’s crackdown. Adding more, it stated that both mining difficulty and hash rate are on a constant path to recovery.
Hash rates and mining difficulty are the factors that measure competition among miners looking to resolve the network’s next block.
Since late July, mining difficulty has increased by 39%. It is nearly equal to the levels before the pre-China crackdown, along with the expectation of upward adjustment placing this week. Moreover, Glassnode mentioned that the difficulty ribbon had shown its firmest reversal since December 2018.
Wu Blockchain, a Chinese media outlet, reports that Bitcoin mining difficulty saw a 4.71% increment at 703,584 block height on October 5. Exhibiting a sixth sequential increase since July 31.
In the May 2020 halving event, the block rewards were cut by 50%, taking 12.5 BTC to 6.25 BTC. Despite this, mining profitability is significantly increasing ever since.
Glassnode also added the following remarks in the report:
“Despite dramatic shifts in the mining market, multiple deep price corrections, and a halving event in May 2020, the Bitcoin block reward value continues to rise, creating incentives for the market to adapt, innovate and recover.”