Many Chinese miners stopped working due to rumors of stricter digital currency mining laws and even the possibility of banning mining activities in the country; This has reduced the extraction difficulty by 16%.
to the the report The difficulty of extracting bitcoin fell by about 16% to 21 trillion on Sunday, the sharpest drop this year. The amendment shows that Chinese miners have stopped mining before the government imposes further restrictions.
Bitcoin Mining Hardness Measures the amount of processing power needed to generate new bitcoins. The network adjusts the hardness every two weeks to balance the level of competition between miners. Less extraction difficulty indicates less competition.
More than 75% of the miners who approve bitcoin transactions are in China. Last Friday, the Chinese government added bitcoin mining to its list of industries that need oversight to protect the economy.
Shortly afterwards, Huobi and OKEx exchanges restricted Chinese customers’ access to certain services. A Hobby spokesman told the script that the restrictions were in response to government statements. OKEx also told the script that the restrictions are aimed at coordinating with lawmakers.
Government sources reportedly told Caixin that the government was concerned that the digital currency would harm uneducated investors and would prefer to use electricity and computer chips elsewhere.
A Chinese journalist tweeted:
Beijing believes that digital currency is a bubble and that even its risk is passed on to older people with less investment experience. Regulators want to stop bitcoin mining altogether, but this is not possible.
Inner Mongolia has begun restrictions. The region’s autonomous government is reportedly considering adding bitcoin miners to its blacklist of social credentials and has proposed that miners’ communication licenses be revoked.
Yesterday’s hardness adjustment increased the average block production time to 11 minutes and 55 seconds; Approximately 4 minutes longer than the last difficulty setting on May 13, when the average block output reached 8 minutes and 14 seconds.
In the previous hardness adjustment, the extraction hardness reached a new record and increased by 21.53% compared to the previous hardness level on May 1. This change was felt throughout the market.