With heavy rainfalls and flooding hitting Southwest China’s Sichuan province, the global computing power dedicated to mining bitcoin (BTC) has now dropped by about a quarter, as some Sichuan-based miners have been forced to unplug from the network.
The bitcoin computing power, usually referred to as the hashrate, dropped from a level of more than 140 million TH/s on August 14, to just over 105 million TH/s yesterday. The drop marks a decline of about 25% over just three days, which is an unusually sharp drop in the bitcoin hashrate over such a short period.
Commenting on the disruption the flooding is causing for miners, Kevin Pan, CEO and co-founder of the major bitcoin mining pool PoolIn, wrote on Chinese social media platform Weibo that the drop in computing power due to the rainfall “was very obvious,” while sharing a screenshot that showed the decline in hashrate from Chinese miners.
He further explained that while some mines were forced to shut down due to internet access and electricity being cut off, others did so proactively to ensure the safety of onsite personnel.
And while the hashrate has dropped, the difficulty of mining bitcoin is still expected to go up by another 3.14% during the next difficulty adjustment in about five days from now, data from BTC.com currently shows.
To maintain the bitcoin networks’ normal 10-minute block time, bitcoin’s mining difficulty is automatically adjusted every two weeks (or precisely every 2016 blocks).
Despite the increase in difficulty, however, the average fee paid to make transactions over the bitcoin network has seen a decline since reaching a peak of more than USD 5 on August 3 (based on the 7-day simple moving average). The figure is down to just over USD 3.5, after falling for two consecutive weeks.
As of press time on Tuesday (11:32 UTC), the price of bitcoin is up by 3.1% over the past 24 hours, trading at a price of 12,260. Over the past 7 days, the increase in price for the number one cryptocurrency was nearly 4.3%.
Finally, despite rising bitcoin prices over the past week, data from ByteTree shows that miners on the whole are still selling off more BTC than they mine. In the past week, they generated BTC 6,581, and spent BTC 6,752.
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