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Cryptocurrency : Bitcoin’s Mining Power Has Its Worst Fall Since 2017

Key facts:

The drop came after the ban on BTC miners in China’s Qinghai province.

The last drop in the hashrate this year, which occurred in April, was 37%.

The Bitcoin network, since April, has been presenting instability in its hashrate, suffering considerable drops that have made the mempool look saturated. Yesterday, there was a drop of about 40% of the hashrate, this being the worst fall since May 2017, when it plummeted 55%.

According to data from the Coinwarz portal, between June 9 and 10, the power of the network went from 178 EH / s to 107 EH / s. This drop slightly exceeds that of April of this year, which meant a 37% reduction in the hashrate.

Currently the hashrate is experiencing a slight recovery, standing at 113 EH / s. Source: Coinwarz.

Drops in the Bitcoin hashrate can mean blocks within the network take longer to mine, causing a bottleneck in incoming transactions, resulting in a increased mining commissions.

In recent days, activity on the bitcoin network had slowed, emptying mempools and reducing commissions to an average of up to 1 sat / vbyte. After the drop in the hashrate, commissions have returned to an average of 18 sats / vbyte,

Bitcoin blocks start to fill with transactions again, increasing commissions from last week’s levels. Source: mempool.space

If the network begins to suffer agglomerations of pending transactions due to low computing power compared to the difficulty of mining, the commissions could increase further. If this scenario is present, users will have to wait for the next difficulty adjustment period, or for the network’s hashrate to increase again, to see, again, lower commissions.

The recent crash happened three days before the end of the next difficulty adjustment period. While the difficulty adjustment takes an average of the entire period of 2016 previous blocks, this could mean that the decrease in mining difficulty will be slight for the next period.

China and the ban on cryptocurrency mining

The drop appears to be linked to recent Bitcoin mining bans in China’s Qinghai and Xinjiang provinces. This after the measures imposed by the Chinese government to combat the extraction of cryptocurrencies.

According to the report, the measures established against cryptocurrency mining are in favor of avoiding the indiscriminate consumption of energy from the burning of fossil fuels.

Some mining pools, such as Antpool, one of the most famous and used in China, recorded a drop in their hashrate of about 25% after the announcement of the closure of miners in China.

Graph of the Antpool pool hashrate where you can see the drop that occurred yesterday. Source: Antpool.

China accounts for 65% of global mining according to data from the University of Cambridge Bitcoin mining map, in its April update. In the last drop in the hashrate last April, the mother cryptocurrency had a decline in its price of about 14%, as reported by CriptoNoticias. However, in the last 24 hours, Bitcoin is positioned close to $ 38,000, up 8%, at time of writing.

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