Following the most significant short-term interruption in network history earlier this year, Bitcoin mining operations are on the mend, and miners are enjoying the benefits in terms of income.
Glassnode, an on-chain analytics service, says in its Oct. 4 Week on Chain report that Bitcoin hashrate has mostly recovered despite 50 percent of the network’s hashing power being offline in May due to China’s crackdown on the industry.
The hash rate is a measure of a Proof-of-Work network’s overall computing capabilities. According to Glassnode, both hash rate and mining difficulty (which gauges competition among miners attempting to solve the network’s next block) are on a “consistent road to recovery.”
Notably, difficulty fell by 28% in early July. Mining difficulty has almost reverted to pre-China exodus levels, having risen 39 percent since late July, with another upward adjustment anticipated this week.
According to Glassnode, the difficulty ribbon has seen its greatest reversal since December 2018. According to the Chinese media source Wu Blockchain, Bitcoin’s difficulty rose by 4.71 percent on October 5 at block height 703,584. It is the sixth rise in a row since July 31.
Despite the fact that block rewards were cut by half in May 2020, from 12.5 BTC to 6.25 BTC, mining profitability has risen considerably since then. According to Glassnode, the current mining profitability of $40 million per day is up 275 percent since before Bitcoin’s halving in May 2020, and has risen by approximately 630 percent compared to June 2020’s lows of $6 million to $8 million.
“Despite significant changes in the mining industry, several severe price declines, and a halving event in May 2020,” the study said, “the Bitcoin block reward value continues to grow, providing incentives for the market to adapt, innovate, and recover.”
