Bitcoin (BTC) Hashrate Falls from 54 to 47 Quintillion Amid Profitability Concerns and BCH Hash War
It seems that the Bitcoin hash rate is experiencing a decline in the last days. According to data provided by Blockchain.com, the Bitcoin hash rate taking into account the 7 days average. If we see the daily hash rate fluctuation it is also possible to see a decline but is not as hard as in the other chart.
On November 4, the Bitcoin network had a hash rate of 54,000,000 TH/s. On November 11, the number went down to 46,000,000 TH/s. This is similar to the hash rate that the network had back at the beginning of August.
This hash rate reduction might be influenced by two things. Bitcoin price operating relatively stable close to $6,400 leaves miners with a very tight profit or not profit at all. Compared to the earnings that miners had at the beginning of the year, keep operations with this price might not be profitable anymore.
Another reason could be related to Bitcoin Cash’s hash rate war that is now taking place. Bitcoin Cash is going to be performing an upgrade on November 15. Some BTC miners could be moving to Bitcoin Cash in order to support one of the two proposals Bitcoin SV or Bitcoin ABC.
Craig Wright commented about this:
“When we move our hash off BTC into BCH (oh I forgot to say that we are there too) the BTC mining hash drops and suddenly BTC mining is MORE profitable. Stay on BCH as we will and lose big time… Think of this as a short-term gift to mining BTC.”
Bitcoin Cash hash rate could also fall because some of the hash rate is expected to go to Bitcoin SV, the proposal supported by Mr Wright. But instead, it will not be just a chain split, it will be considered as a 51% attack on Bitcoin Cash, as he said.
Apparently, Bitcoin SV supporters believe that if they have more than 51% of the hash rate of the network, miners would switch directly to Bitcoin SV. However, users can decide where to move and who to follow, whether the Bitcoin ABC proposal or Bitcoin SV.
Miners in the cryptocurrency space follow price and profitability. BSV, for example, would just get between 10% to 20% of the BCH hash rate. Moreover, the difficulty to mine in that network adjusts itself by block.
According to Trustnodes, it would be possible to find one BCH block per hour using 20% of the current BCH hash rate. Each of the coins could be sold at a price of $450, meaning that the miner will receive $5,600 dollars per block. At the same time, this 20% of the network will also be getting one BSV block per hour, which will be worth $1,200 if each BSV is sold for $100 dollars. Nevertheless, once the first block is mined, the difficulty starts adjusting. If Calvin Ayre, one of the supporters of Bitcoin SV, takes the decision to send all the hash power to BSV, they will be getting fewer funds if they split in this way compared to the profits they would receive if they follow the most profitable network.
In Bitcoin Cash, the hash rate would also be reduced if miners decide to back the new proposals. That means that the difficulty in Bitcoin Cash would be reduced and would become even more profitable than BTC. In this way, some BTC hash rate could move to BCH and some BCH miners could move to BSV.
This could end up with a hash rate drop in Bitcoin’s network. And this is something that can be seen even now. Since the hash rate in Bitcoin’s network reached an all-time high at the end of August. At that time, the hash rate surpassed 61,000,000 TH/s, at the end of October, the network has also reached the lowest point in months after being close to 40,000,000 TH/s.