Bitcoin Mining Difficulty Falls as Ethereum Validator Count Hits Record High

March 7, 2022

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As cryptocurrency regulation takes precedence within countries worldwide, EU residents have been braced for a potential ban on Proof-of-Work blockchains, such as Bitcoin. However, in an encouraging change of stance, it was announced last week that all negative wording regarding such blockchains has been removed from upcoming policies. As policymakers tried to push through favourable regulation, elsewhere Bitcoin mining difficulty dropped for the first time in 3 months and the Ethereum blockchain enjoyed a new milestone – now boasting over 300,000 validators within the new Ethereum 2.0 Beacon Chain.

Proof-of-Work ban removed from new EU crypto regulation
Bitcoin difficulty reduces for the first time in 3 months
Founder of Skybridge Capital believes $500K Bitcoin possible long term
The number of validators within Ethereum’s Beacon Chain rises above 300,000

Bitcoin ban removed from upcoming EU crypto regulation

Within preceding versions of the European Union’s Markets in Crypto Assets (MiCA) framework, wording suggested that the EU could ban all Proof-of-Work (PoW) blockchains. Designed as a regulatory framework to help streamline distributed ledger technology and protect users and investors, the MiCA document may have severely impacted blockchains such as Bitcoin and Ethereum.

Blockchains such as Bitcoin that utilise a PoW consensus mechanism require comparatively more power than other blockchains as a result of a process known as “mining”. Miners must commit a certain amount of computing power before the blockchain can be updated. As a result, the combined computing power of all miners within a blockchain network can be significant.

The original version of the MiCA framework was expected to be approved in February, however, representatives from the cryptocurrency community managed to get the vote postponed – due to the negative statements regarding energy-intensive mining. After the release of the latest version, the wording regarding PoW blockchains appears to have been removed.

The news was announced via a tweet from BTC Echo, a German news outlet, and later confirmed by Stefan Berger, the rapporteur to the legal proceedings. Berger also confirmed negotiations had now resumed and commented that “we now want to get the MiCA framework through the Parliament as quickly as possible.”

Golden Bitcoin within a clamp in front of a European Union flag

Bitcoin mining difficulty falls by 1.49%

For the first time in 3 months, Bitcoin mining difficulty has fallen. After reaching a peak hashrate of approximately 250 ExaHash per second (EH/s) in mid-February, the computing power behind the leading blockchain has fallen into a range between 180 and 220 EH/s. As a result, the difficulty of mining each block has lowered.

The latest difficulty change took place on Thursday during block 725,760 of the blockchain. Although a rise in Bitcoin mining difficulty was expected, the difficulty of finding a new block in the blockchain dropped by 1.49%. The last time that Bitcoin mining difficulty fell was in late November 2021, when the blockchain experienced a similar drop in mining hashrate.

The 1.49% reduction means that it is now 1.49% easier for Bitcoin miners to solve the Proof-of-Work census mechanism and, therefore, find a BTC block reward. Prior to the drop, the blockchain difficulty had increased on six consecutive occasions. The next difficulty change is now scheduled for March 17 2022.

Foundry USA continues to hold the number one spot among Bitcoin miners, accounting for 18.41% of the global hashrate over the last 30 days. The US-based Bitcoin mining pool outpaced Chinese competitors after the Chinese ban on Bitcoin mining in 2021.

A graph showing Bitcoin difficulty expressed on both a linear and log scale. — *Bitcoin difficulty is expressed on both a linear and log scale. Source: BTC.com*

Skybridge Capital founder believes $500K Bitcoin highly probable

The founder of Skybridge Capital, an investment management firm, doubled down the future price of Bitcoin. Although predicting $100K by the end of 2021, Anthony Scaramucci still believes that $100K is highly likely within the next two years. Scaramucci admitted during an interview with Magnifi that he had not assessed what would be required from a regulatory perspective to get there, but that he was “very confident” it would reach $100K by the end of 2023.

During the same interview, Scaramucci went on to explain that $500K was a likely long-term price prediction for the coin. He explained, “This is early adopting technology. This will be very volatile. There’ll be periods of time where Bitcoin will crash, down 50 plus per cent. But if you’re willing to zoom out and look at the long-term chart and look at the adoption story, could bitcoin get to a half a million dollars a coin? I believe it will.”

According to the founder, 4% of Skybridge Capital’s funds currently sit in Bitcoin.

*Founder of Skybridge Capital, Anthony Scaramucci speaking a National Press Club in 2018.*

Number of validators within Ethereum’s Beacon Chain moves past 300,000

In the move to take Ethereum from an energy-intensive Proof-of-Work blockchain to a more scalable Proof-of-Stake blockchain, the number of validators within the upcoming Ethereum 2.0 network ticked over 300,000 last week. As each validator within the network needs to stake a minimum of 32 ETH, the total of staked ETH now stands at over 9.6 million. The new Beacon Chain moved past the key 300K validator milestone on February 28 2022.

The 9.6 million ETH currently staked within the network is now worth approximately $24.8 billion and has added deflationary pressure to the cryptocurrency. Each new validator that joins the network means that more ETH is removed from the circulating supply.

To transfer miners away from the old PoW network to the PoS system, Ethereum’s new Beacon Chain was originally launched in December 2020. Since then, the Ethereum community has been encouraging as many users as possible to become a validator and, therefore, add to the security and decentralization of the network. Eventually, the old PoW system will be phased out – although the timing of this is still unknown.

The Arrow Glacier upgrade – implemented in December 2021 – delayed the final point at which miners would be motivated to transition across to the new blockchain. The upgrade moved the transition point to June 2022 but this could be delayed once more if key factors do not align.