Bitcoin

Bitcoin hash rate continues death spiral after China crackdown on miners


The Great Bitcoin Miner Exodus is in full swing. The total hash rate of the network is shown significantly. Currently, the terahash per second is at its lowest level in the past 12 months. This means that mining bitcoin has not been easier in a whole year. Also, there is less competition. So, it is good news for all the other miners scattered around the world. However, don’t expect it to last long.

Related reading | How China Bitcoin FUD Lowers BTC Production Cost

Tons and tons of mining equipment are currently traveling to their new homes. There are reports of a massive operation in Kazakhstan, a country neighboring China. There are also rumors of equipment and personnel already settled in Texas. United States of America batch making To become the capital of bitcoin mining and, apparently, the efforts have already paid off.

Back in China, the crackdown is no longer common. it’s the truth. CNBC Reports:

China’s crackdown intensified over the weekend, as authorities in China’s hydropower-rich province of Sichuan ordered crypto miners to shut down their operations.

According to reports, more than 90% of the bitcoin mining capacity in China has been shut down.

Some experts see this as a good thing. It is estimated that China controlled between 60 and 70% of Bitcoin mining, and the future looks much clearer as they exit the picture. The hash rate will suffer for some time, but there will be more decentralization. Also, FUD carbon powered energy consumption will decrease. Although miners in China are mostly located in regions rich in renewable energy, bitcoin critics have had a hard time believing reports from this side of the world.

Total Hash Rate (TH/s) of the Bitcoin network | Source: Blockchain.com

Another Chinese ban, a reflection of 2017

This is not the first time that the Chinese government’s cryptocurrency policy has caused chaos in the market. In September 2017, they completely banned cryptocurrency exchanges. a little earlier, I mentioned Bitcoinist:

While Chinese exchanges accounted for over 90% of bitcoin trading volume, this completely changed with the intervention of the PBoC leading to the end of Margin Trading And the Without fees Policies and temporary suspension of withdrawals.

All these changes contributed to China Volume Reductionwhich saw its market share drop to 3-5% of global trading volume.

So, historically, the Chinese government has shown no mercy in shutting down billion-dollar companies by decree. It is also worth noting that most of the banned cryptocurrency exchanges have just closed their offices in China and moved their operations to other countries. They continue to work to this day, and for users outside of China, this painful step has not affected their experience at all. Bitcoinist Reports repeatedly:

The tightening led to a staggering drop in the Chinese yuan – which made up more than 90 percent at its peak – as traders made a mass out-migration, one to oneand foreign exchanges. As a result, jurisdictions with friendlier laws have experienced a boom in trading volume حجم The market has also turned upside down

The current situation with miners is a reflection of that. Mining is in the process of being turned upside down. The hash rate will be refunded.

BTCUSD Price Chart for 06/25/2021 - TradingView

BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com

Hash rate will rise againرتفع

In retrospect, we should have seen that coming. Just two months ago, after a suspicious blackout, NewsBTC reported:

According to the Beijing Bureau of Economics and Information, there have been concerns about energy consumption related to these activities. PengPai quotes Yu Jianing, the rotating chair of the China Blockchain Special Committee, claiming that A country’s environmental requirements may lead to crypto mining being more ‘strictly regulated’. Jiangning said this would be “inevitable.”

Related reading | China’s Bitcoin Mining To Unlock Historic Moment, Will BTC Be Affected?

As for the possible reasons, Lucas Nuzzi of Bitcoin Magazine cites the upcoming Digital Yuan CBDC. It also defuses the FUD by informing us, “The daily hash rate is, by design, a fluctuating metric not suitable for tracking permanent changes in the mining landscape. “

We should also take into account Nick Carter’s assertion that all of these things happen during, “Bitcoin continues to maintain 100% uptime, which is nothing short of a modern rogueto. “

In Bitcoin, everything changes while everything remains the same. The hash rate will rise again.

Featured Image by OpenClipart-Vectors from Pixabay - Charts by TradingView and Blockchain.com





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