/biz/ - Business & Finance

> Bitcoiner since 2012
BTC just entered the 6.25 block reward epoch and the reduced profitability started its death spiral.
Half the block reward means half the profitability. This means the less efficient miners leave the network as they can no longer compete. Total amount of hash power drops and because the difficulty remains the same the time between each block increases. So far it looks like about 40 minutes per block, possibly longer, this is 4 times as long as usual making profitability drop even further. BTC profitability is now 1/8th what it was in the previous block epoch.
BTC was half way through its 2016 block difficulty adjustment cycle leaving about 1008 blocks to go before difficulty adjust to match the reduced block reward. So in a best case scenario if all the current miners stay on board and hash power doesn't reduce further, it'll take at least 28 days before the difficulty adjusts to increase the profitability from where it is now.
The slower block times also mean reduced transaction capacity and increased fees. Eventually the mempool will be so full of transactions that nodes will start to fail.