How to earn on the difficulty slump
In summer of 2021, the overheating of the market and the crackdown in China led to the biggest-ever plummeting in mining difficulty. As of July 22, the difficulty declined to 13.67 T, so the slump from the May highs was about 50%. However, no matter how scary it may sound, any crisis is a window of opportunity. First of all, it is necessary to understand what happened.
The flight of the market into the stratosphere after bitcoin overcame the $20k was a natural consequence of the loss of fear and a surge of greed of traders who longed for new emotions. What happened between $40-60k is left to the conscience of the financial titans. By the time their appetites were satisfied, the number of participants involved in mining raised the hashpower and followed by the difficulty, to unprecedented heights.
The growth of the hashrate causes a surge in difficulty.
Remember that the bitcoin network automatically supports the target block time of about 10 minutes, in accordance with this, the level of difficulty is revised every 2016 blocks or about once every 2 weeks. The higher the difficulty, the harder it is for miners to earn money. The more equipment is involved in mining, the higher the hashrate, which means the higher the cost price of mined coins.
Partly as the result of manipulation, the May highs exceeded the wildest expectations, giving rise to a new round of six-digit forecasts, but the air was already saturated with the search for reasons for the end of the prolonged party. And soon these reasons were found. This time Elon Musk suddenly fell out of love with bitcoin for the unecological nature of mining, and the Chinese government decided that there was no longer a place for the unregulated digital asset industry in China.
As a result, Musk, with his tweets, returned bitcoin to where he began to accelerate it, and the shadow of the Chinese regulator hung on the industry with a heavy weight, mowing down not only traders, but also miners themselves from the market. The loss of hashpower on that scale led to an epic plummeting in difficulty.
The lower the difficulty, the easier and cheaper mining is, the more bitcoins you can earn.
So, Is it good or bad for miners what is happening now? The answer is obvious. We are in the very market cycle when it is most profitable to enter this business. We haven't seen such an attractive break-even point for mining since December 2019.
But this does not mean that you need to buy equipment! Now everything is easier.
CryptoUniverse, in a partnership with Binance, offers a new mining program in which miners, teamed up in a pool, buy not equipment, but hashpower, and work on it, receiving a reward that is distributed proportionally among the participants every day.
Today, this is the most modern and effective approach to cryptocurrency mining, which does not require the miner to have engineering knowledge, purchase hardware, configure it and maintain it. By joining a pool and working on the most modern equipment, you can earn much more than if you did it alone.
Difficulty drop is a window of opportunity. In the long term, the difficulty will only increase.
Do not miss the time, join CryptoUniverse right now!