Bitcoin Hashrate Slumps to 8-Month Low as China Miners Shut Down

Bitcoin’s hashrate has dropped to its eight month (Nov 2020) low as Chinese mining companies begin to shut down. Bitcoin’s network hashrate, a metric of the computing power employed by miners to run the network, has dropped by 46% from its high in mid-May.

Bitcoin hashrate is presently 91.2 EH/s (quintillion hashes per second), a steep decline from the level of 171.4 EH/s recorded just six weeks back, as per Bitinfocharts.

Mining profitability has also decreased, according to Bitinfocharts, from a maximum of $0.449 USD per day per terahash per second to current level of $0.226 during the same period. The BTC hashrate hasn’t been this low in 8 months, with the latest dip under 90 EH/s recorded on November 3, 2020.

A larger hash rate implies additional competition among miners to authenticate new blocks, as well as a larger scale of energy sources necessary to carry out a 51% assault, rendering the network safer.

The continuing raid by Chinese authorities on Bitcoin mining operations around the nation is causing a drop in hashrate and mining efficiency. Images of large mining pools in China’s Sichuan region being closed down were widely circulated on social media over the weekend.

Officials in Ya’an City, a prefecture-level city in Sichuan’s western region, directed domestic Bitcoin mining companies to stop down on June 18. Sichuan, according to CoinShares, organized more than 50% of the worldwide hash rate in late 2019, enticing miners with its inexpensive and seasonally ample electricity.

On June 12, Yunnan provincial officials also issued a notice directing an inquiry into the suspected illegal usage of electricity by Bitcoin mining individuals and organizations. As per a June 15 CNBC article, Castle Island Ventures partner Nic Carter noticed that Bitcoin’s hashrate was declining, predicting that “it looks probable that installations are being switched off across the country.” Early in May, indicators of Bitcoin hashrate leaving China were beginning to emerge.

Eventually time, at least 50% of Bitcoin’s hashrate will depart China, according to Carter. Because of favorable laws and an availability of low-cost sustainable power, North America, especially Texas, has become one of the top destinations for what could be termed the “great mining exodus.”