Overview of Bitcoin Mining Challenges

The Bitcoin network is poised for an increase in mining difficulty during the next adjustment, scheduled for December 11. This comes as hashprice, a crucial metric measuring expected miner profitability per unit of computing power, sits at record lows.

Upcoming Mining Difficulty Adjustment

Bitcoin’s next mining difficulty adjustment is expected to occur at block 927,360 at approximately 12:09:34 AM UTC, marginally increasing the difficulty from 149.30 trillion to 149.80 trillion, according to CoinWarz. The most recent adjustment, which occurred on Thursday, decreased the difficulty from 152.2 trillion to 149.3 trillion, resulting in an average block time of about 9.97 minutes at the time of this writing, slightly below the 10-minute target.

Low Hashprice Raises Concerns

Despite the recent drop in mining difficulty, hashprice is hovering around $38.3 petahashes per second (PH/s) per day, according to Hashrate Index, up from the record low below $35 PH/s reached on November 21. For context, a hashprice of $40 PH/s is a break-even level for miners and the point where they must consider de-energizing their machines or continuing to operate.

Regulatory and Geopolitical Headwinds

The mining industry continues to face mounting challenges, including regulatory bans or restrictions, rising energy costs, and geopolitical tensions between the United States and China that could disrupt critical equipment supply chains.

US Investigation of Bitmain

The United States Department of Homeland Security (DHS) is investigating crypto mining hardware manufacturer Bitmain, based in China, to determine whether its machines can be remotely accessed or used for espionage purposes. In 2024, US Senator Elizabeth Warren, a vocal critic of crypto, suggested that ASICs could be used for spying on US military bases and sensitive national defense installations. Bitmain is the leading manufacturer of application-specific integrated circuits (ASICs) used to mine proof-of-work (PoW) cryptocurrencies. The company commands an 80% market share, according to the University of Cambridge. Restrictions, tariffs, or sanctions imposed on the company by US officials could trigger supply chain issues for the mining industry, which is heavily reliant on Bitmain.

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