Although the price of Bitcoin has plummeted this week, the network’s hash rate has also fallen sharply since it hit its high on May 9. Since then, due to the downturn in the encryption market, power outages in Sichuan Province, China, and the upcoming difficult changes.
Similar to price, Bitcoin hash rate fluctuates sharply
After the price of BTC dropped sharply last week, the hash rate of Bitcoin has been fluctuating. After some recovery, Bitcoin (BTC) market data showed that seven days of statistics showed that there was a weekly loss of 15% on Thursday afternoon (EST).
The hash rate or processing power of the network also decreases. There are many factors that indicate the reason why the hash rate has plummeted, because the price of Bitcoin is only one of the reasons.
On May 16, the Bitcoin hash rate of the entire network plummeted, with Antpool -16%, F2pool -11%, Binancepool -14% and Huobipool -23%. People in the Sichuan industry pointed out that this should be a temporary phenomenon. pic.twitter.com/s3fb37t2mK
-Wu Blockchain (@WuBlockchain) May 16, 2021
Another reason for the fluctuation of the hash rate is reports from China. according to When addressing reporters Colin Wu or “Wu Blockchain” on May 16, “The Bitcoin hash rate of the entire network has plummeted.” Wu said that Antpool, F2pool, Binance Pool and Huobi Pool all showed hash rate percentages. loss.
Wu said: “People in the Sichuan industry pointed out that this should be a temporary phenomenon.” In fact, after Wu’s Twitter statement, the hash rate began to rise again. Wu said, however, China’s current demand for electricity is huge. Wu Bangguo further emphasized:
The main reason is that the local weather is hot and the industrial electricity consumption is large, but the water flow of hydropower is insufficient, which is 30% less than in the rainy season. The power company decided to start a temporary blackout of the mine at 2 pm on the 16th.
A tricky accident is expected within 9 days, and the miners may be in a trough
For many years, China’s power grid problems have plagued miners, especially during the rainy season in Sichuan. The rainy season helps hydroelectric power generation, but natural factors can also cause floods and blackouts.
China’s mining advantage is not the only reason why the decline in hash rate has been at work. Another reason for the drop in hash rate may be due to the expected difficulty that will rise within 9 days.
As reported by Bitcoin.com News last week, the difficulty of Bitcoin mining has hit a record high, and at the time of writing this report, it is estimated that the difficulty has changed as much as 13 days away. BTC miners may be “gambling the network” to reduce the difficulty to a lower standard.
If BTC miners increase the hash rate to a high of 180 to 200 exahash (EH/s) per second until today, then the difficulty will jump to about 30.30 trillion US dollars. At the time of writing, BTC’s mining difficulty is $25.0 trillion, instead of jumping to 30.30T, current estimates show a smaller 2.90% peak to 25.77T.
What do you think of the China issue, the price drop, and the drop in Bitcoin’s hash rate after the upcoming spike in difficulty? Let us know your thoughts on this topic in the comments section below.
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