Aug 16, 2022 06:31AM ET
The problems of Texas miners began with the collapse of prices in the cryptocurrency market and the arrival of this year's hot summer. Many miners had to shut down their machines to reduce losses due to excessive energy costs and to comply with government regulations.
Bitcoin mining (BCT) has grown steadily in Texas after China banned mining and launched a fierce crackdown on miners in the middle of last year. The Lone Star State has become a draw for Chinese, Americans, and other miners who have fled the Asian giant.
The low cost of electricity and a favorable regulatory environment make Texas the preferred location for mining. But as the state filled up with large mining facilities and temperatures rose to unbearable levels, electricity consumption and utility bills skyrocketed. In addition, the outages drew strong criticism from local residents.
Now the Texas power grid is more prone to blackouts. Creating new Bitcoins is not only more expensive due to the power consumption of mining equipment, but keeping them fresh is also a real challenge.
Adjusting mining difficulty
Being a decentralized network, the Bitcoin network uses an algorithm coded by the creators of the cryptocurrency in the source code. This difficulty is automatically adjusted every two weeks or so, depending on the number of active miners on the network competing with each other.
This makes it possible to guarantee that the time required to discover a new block is about 10 minutes, which is the same for each block in 2016. When the network determines that in the last two weeks there has been a decrease or an increase in the time needed to mine a new block, it adjusts the difficulty.
On the other hand,
The difficulty is further adjusted with increasing computational power in the network. Whereas when computing power is subtracted from the network, as has happened recently, the mining difficulty is further adjusted.