As reported by Coindesk and Cointelegraph, data from BTC.com shows that this latest drop in difficulty is the biggest single adjustment made by the network since 2011. This latest change was eclipsed by the adjustment in 2011, which saw an 18 percent dip at blockheight 151,200 which is the biggest percentage drop in history.
As outlined by blockchain.com, the Bitcoin mining difficulty is automatically adjusted every 2016 blocks which takes approximately two weeks in order to maintain the average time between each block being mined to 10 minutes.
The mining difficulty literally defines how hard it is to mine a Bitcoin block, which is carried out by finding a hash below a given target.
The harder the Bitcoin mining difficulty, the more computing power it takes to mine the same number of blocks. This is an important feature of how the Bitcoin network protects against 51% mining attacks. The amount of mining power on the network will dictate how the Bitcoin network adjusts the mining difficulty.
Simply put, the more hashing power that is connected to the Bitcoin network, the higher the mining difficulty will become.
Good news for BTC users, miners
The mining adjustment also means that there will be a drop in transaction fees for Bitcoin users and decrease block times. Bitcoin miners are also set to enjoy increased profitability as a result of the change.
As pointed out by Bitcoin mining analysis firm Hashr8, the hashrate is also affected by miners in China moving their operations into Sichuan province in the summer months to take advantage of cheaper electricity rates during the rainy season.
However after October miners are forced to relocate to areas like Xinjiang and Inner Mongolia as electricity rates pick up again in Sichuan. Industry experts believe this is part of the reason for the current mining difficulty drop.