Bitcoin Hash Rate Takes a Big Jump as Miners Migrate from Sichuan, China
Bitcoin price may have taken a breather after a 20% rally, but the same can’t be said about the hash power miners are using to produce BTC.
Towards the end of Sept., the network's hash rate hit a new all-time high in terms of raw value, as per Blockchain.com.
On Nov. 2nd, the hash rate tanked to mid-June levels, under 95 Th/s as China’s rainy season came to an end. One of the biggest Bitcoin mining pools Poolin noted,
“Bitcoin’s network hashrate has been consistently dropping for the past two weeks as miners in China are packing up their operations for seasonal migration.
Without the cheap electricity of the wet season, they are moving from Sichuan to colder regions with cheaper electricity prices.”
The day after that low, bitcoin difficulty saw its second-biggest negative adjustment in the digital asset’s entire lifetime.
Now that the rainy season is over, many miners switched off and started seeking new hosting facilities that helped them see an increase of 25% in revenue per Th/s, making most of the old-gen mining hardware profitable, including S9s, yet again. Poolin, in its latest Miner’s Digest, said,
“It usually takes two weeks for mining farms to migrate to another location, so we expect most of the 40EH/s of network hashrate to return between the 10th and 14th of November.”
And as expected, the hash rate saw a big spike, approaching the ATH again.
As a result of this big jump in hash rate yesterday, the block generation time that surged above 15 minutes, from the regular 10 minutes has come down under 8 minutes.
As such, the unconfirmed transactions in mempool have also come down drastically from 150k two weeks back to a mere 11k. Naturally, the average bitcoin transaction fees have also come down from $13.4 on Oct. 31st to under $6.
Still, the fees are high compared to early 2020 levels when it was under $1, but given the bull run we are seeing, it is to be expected as it was in December 2017, that average fees hit an all-time high at above $55.
Thanks to high fees, Bitcoin miner revenue saw a new high in 2020.
Last week, nearly $21 million were paid to miners in a single day, as per F2Pool. During this time, the Lightning Labs team launched a non-custodial Lightning pool to earn yields on BTC by selling liquidity while F2Pool launched its Conflux mining pool.