The difficulty of mining bitcoins measures how much computing power it takes to create new bitcoins. The network adjusts the difficulty level (approximately) every two weeks according to the level of competition between miners. Less mining difficulty indicates less competition.
Bitcoin mining difficulties fell 16% to 21 trillion on Sunday, the sharpest drop this year. The corrections show that Chinese miners pulled the plug before the government continued to clamp down on mining.
More than 75% of the miners who validate Bitcoin transactions are based in China. Last Friday, the government added bitcoin mining to its list of industries to watch to protect the economy.
Shortly thereafter, Huobi and OKEx prohibited Chinese customers from accessing certain services. A spokesman for Huobi told that the restrictions were due to government statements. OKEx told that its restrictions must stay in line with regulators.
A government source reportedly told China’s Caixin that the government worries cryptography will hurt investors who are uneducated and prefer to use electrical chips and computers for other purposes.
Inner Mongolia has already started fighting. The region’s autonomous government is reportedly considering adding Bitcoin miners to its social credit blacklist and proposing revoking telecommunications licenses for miners.