Bitcoin's network has undergone a significant self-correction, with its mining difficulty plummeting by 11.16% in the latest automatic adjustment. This marks the most dramatic single decrease since July 2021, which followed China's comprehensive ban on cryptocurrency mining. The difficulty adjustment took effect at block 935,429, lowering the metric from its previous all-time high to 125.86 T (terahashes).
The adjustment is a direct response to a substantial decline in the global hash rate, the total computational power securing the network. Data indicates the average block time had risen to over 11 minutes, overshooting Bitcoin's target of 10 minutes. Analysts point to a confluence of factors driving the hash rate down, including a severe broad crypto market downturn that saw Bitcoin's price crash by over 50% from its all-time high above $125,000 to a low of $60,000, squeezing miner profitability.
A significant contributing factor was Winter Storm Fern, which swept through the United States in January, disrupting power grids across 34 states. Major U.S.-based mining operations, including the world's largest mining pool Foundry USA, were forced to temporarily curtail energy usage. Foundry USA's hash power briefly dropped by approximately 60%, from nearly 400 exahashes per second (EH/s) to around 198 EH/s.
This event highlights the network's core self-regulating mechanism. The difficulty adjusts approximately every two weeks (every 2,016 blocks) to maintain consistent block production. A lower difficulty means it becomes easier for the remaining active miners to solve the cryptographic puzzles and earn block rewards, effectively boosting their profitability. Experts emphasize this is the network functioning as designed. "The difficulty algorithm is Bitcoin's shock absorber," explained a veteran mining engineer.
Looking ahead, data from CoinWarz projects the next adjustment on February 23 could see a further decrease of about 10.4%, bringing the difficulty down to approximately 112.7 T. The total network hash rate had declined to a four-month low in January, influenced not only by the storm and market conditions but also by a trend of some miners shifting resources to AI data centers and other high-performance computing ventures.
