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The difficulty adjustment only occurs after a certain number of blocks are mined. If the price drops rapidly enough that most miners shut down, it might never g
by ForHackernews 8y ago
The difficulty adjustment only occurs after a certain number of blocks are mined. If the price drops rapidly enough that most miners shut down, it might never get to the difficulty adjustment.
- bdcravens 8y agoThat would have to be a pretty spectacular decrease. The difficulty changes every 2016 blocks, which is typically 2 weeks. If 3/4 of all miners dropped out, it'd take 8 weeks instead. Once that difficulty change kicks in, it'd likely be a pretty big drop, yo-yo'ing in miners that may have been unprofitable before. Keep in mind that many miners are operating with little to no marginal costs (ie electricity costs) so there will always be someone mining even when it seem irrational.
- gizmo686 8y agoAlso kerp in mind that a 75% reduction in the net hashrate would result in congestion, and therefore higher transaction fees which would dampan the loss of mining power until the adjustment.