Bitcoin mining equipment in China has faced a precarious situation. There have been several reports and videos on Thanksgiving weekend that show the closure of bitcoin mining equipment and many argue that the closures have to do with the fall in bitcoin prices.
The good news is that the closure of such mining facilities does not necessarily mean that the bitcoin will be closed accordingly. Bitcoin's fundamental project ensures that if there are any shutdowns of mining facilities, the bitcoin protocol increases incentives for miners to stay online. Breaker Mag indicates this quality as what prevents it bitcoin from the real disappear. This type of system is called adjustment difficulties.
To better understand the difficulty adjustment, it is useful to know how mining works. Basically, the blocks are added to the transactions on the bitcoin register through a data mining node. The knot is rewarded with a new one bitcoin. The process also describes the proof of work, which requires miners to solve a cryptographic puzzle. The mining mining process is complicated and whoever manages to find the random solution will receive the reward. Random quality is an integral part of the difficulty setting. When the blocks of 2016 cross the system, the bitcoin readjusts the difficulty of locating the blocks by altering the range of solutions that the miners try to guess. The difficulty also depends on the power of extraction of the network.
With less extraction power, the fix correction is mitigated. On the other hand, more power and competition lead to more difficulties. However, at the end of the day, the bitcoin protocol is also influenced by the processing of energy, electricity and time. There are reports that show that the difficulty of regulation has diminished.
Reducing the difficulty can lead to a reduction in costs linked to the blocking of mining activities and can therefore make miners' profits easier. One of the few factors that do not change is the cost of electricity, which is enough for bitcoins. Some estimate that it costs $ 2,500 to extract a block.