Earlier than the latest halving, many had been prophesying a so-called “dying spiral” for Bitcoin. This idea hinges on the concept the halving of the block reward results in an exodus of miners as a result of sudden unprofitability of mining actions. In consequence, the community hashrate decreases and the block time will increase, that means that miner income additional diminishes, pushing extra miners off the community. This loop would then allegedly proceed till there isn’t a one left to mine Bitcoin (BTC).

Bitcoin mining problem. Supply: Glassnode.

On September 20, Bitcoin skilled one of many largest upward mining problem changes in its historical past. In reality, it’s the second main upward adjustment for the reason that halving. So, had been the doomsday prophets proper all alongside?

Bitcoin hashrate and block time (14-day common). Supply: Glassnode.

With the intention to reply this query, we have now to grasp what triggers problem changes. All Bitcoin miners compete to unravel the following block. The extra hashpower the community enjoys, the sooner that may occur. With the intention to guarantee that the era price stays at an interval of 10 minutes per block, Satoshi Nakamoto embedded a function into the protocol that adjusts the problem roughly each two weeks. If throughout this era, the time between blocks falls under that mark, the problem adjusts upwards. If the time between blocks rises above that quantity, the other happens.

These two latest changes got here on account of an immense enhance in hashpower. Thus, as a substitute of supporting the dying spiral situation, it will seem to point the superb well being of the Bitcoin community.