Bitcoin Mining: Network Congestion, Fees Uptick, China Ban, & Russian Hash Power in Play
In the world of Bitcoin mining, the hash rate of the network, the computing power used to validate BTC transactions has taken a drop following the positive difficulty adjustment of 8.8%.
The 7-day average hash rate of the network is currently at 131 EH/s, down from the all-time high of 146.8 EH/s, as per Blockchain.com.
A decline in the hash rate resulted in a sudden jump in the total number of unconfirmed transactions in the mempool to over 91.2k today only to get back down to 43k shortly.
This clogging of the network happened as the Bitcoin price broke new ATH’s yesterday. This led the crypto exchange Coinbase to experience delays in BTC withdrawals.
Before the issue was resolved less than five hours after the incident was first reported, Coinbase stated, “We are currently experiencing delays in processing BTC withdrawals due to Bitcoin network congestion.”
This, as usual, had the fees on the network jumping to $5.3, up from around $2 on Nov. 22nd. Miners are enjoying this spike in fees and price with their 7-day average revenue pushing above $18 million.
China is at it again
Amidst this came the report from China that crypto miners located in Baoshan, Yunnan have received a notice of the ban on November 30. As per the document, the power station is asked to stop supplying power to the miners.
After Sichuan and Xinjiang, Yunnan is the third-largest mining place in China.
According to Chinese publications, the attitude of Chinese local power companies continues to change towards crypto mining. It is reportedly more of a demand for economic interests than because of political pressure.
“China rolling out all the old tricks. Bull market confirmed,” commented Alistair Milne on this.
Siberia Dominates Russia’s Hash Power
According to a report by HASHR8 Inc., Russian bitcoin miners rank among the top three countries for contributing hash rate to the largest network.
It further reveals that Russia’s Siberian region accounts for the dominant portion of the country’s mining facilities. It is the “significant energy surplus from advanced hydropower infrastructure in the region” that enables the miners to “secure extremely competitive electricity rates.” The report stated,
“The estimates indicated that Russia’s share of hashrate was comparable to that within the United States. Recent estimates by industry professionals in Russian mining put Russia’s energy draw from mining at ~800 to 900 MW.”
The report mentions that the federal law passed in the country this year “clearly defines Bitcoin mining as an economic activity.”
It further noted that pooling activities must be carried out with a “foreign entity.” While the mining hardware imported is subject to a 20% tax, those imported indirectly through Kazakhstan only involve a 12% VAT charge.