Bitcoin Hash Rate Drops 40%, Resulting in Increased Block Time & Mempool to Fill Up to Dec 2017 Level
Since last week, the hash rate of the Bitcoin network has seen a decline.
This week, the computing power used to mine BTC dropped under 100 Th/s, down almost 40% from the all-time of 157.65 on Oct. 17.
After falling to 97.9 Th/s on Tuesday, we are back above 100 Th/s, as per Bitinfocharts.
This drop in hash rate coincides with the correction in Bitcoin's price, which went from nearly hitting the 2019 high at $13,900 to under $13,000.
The next difficulty adjustment, a lagging indicator of the network hash rate, is in about four days is also expected to decrease by about 12.5%.
While the drop in hash rate has increased the block time to above 14 minutes, the negative difficulty adjustment would again make it easy for miners to generate BTC.
For now, this has caused a backlog of transactions waiting to be confirmed on mempool. The last time the total number of unconfirmed transactions in the mempool went this high (147.3k) was around the bull market's peak in December 2017, as per Blockchain.com.
The recent decline in the bitcoin network's hash rate has been likely due to Chinese miners relocating equipment for the dry season as the rainy season comes to an end, which helped push it to new highs in the first place.
“With the concentration of mining facilities and hashrate in southern China, we can’t forget how important the end of the Bitcoin rainy season is every year, setting a precedent where the mining difficulty tends to stagnate or even decrease over the months of October-November while the hardware is moving from one facility to another,” noted one of the largest bitcoin miner pools, F2Pool.
The hash rate fluctuations are expected to decrease as China’s share continues to drop, which has already gone down from 75.62% in September of 2019 to 65.08% in April 2020, as per CBECI.
For now, according to them, some miners will take advantage of the opportunity to upgrade their hardware and get ready to jump into 2021 with new devices.
Amidst this, Antminer has reportedly announced that it has sold an additional 10,000 S19Pro to the largest self-operated mining company in North America, Marathon Patent Group.
The company ordered 22,660 S19Pros this year, which is expected to be completely delivered in June next year.