Chinese Bitcoin Mining Farms Hit Hard by Floods, Hash Rate Crashes Across Mining Pools
- Bitcoin hash rate is reaching new all-time highs as the price surges above $12,000 to a 13-month high.
The hash rate of the largest network had a rocky start to 2020, seeing a huge drop following the March price crash and then due to May 11th halving. But now it has fully recovered and even eclipsed the previous levels.
This means the fundamentals are bullish, and network security is stronger than ever.
Bitcoin miner revenue, which has become more dependent on trading fees following the halving, has also been growing. Thanks to the average trading fee rising from $0.81 to $2.31 post halving, miner revenue surged 7% in July.
Starting at nearly $16 million, bitcoin miner revenue rose to $19.8 million in mid-February, as per Blockchain.com. But a month later, this revenue crashed to $6.9 million due to the price crash. But before the halving, it climbed to over $20 million only for the reward halving to push it back around $7 million.
Now, in August, so far, miner revenue is keeping in the range of $13.7 million and $10.39 million, the lowest point of this month hit today.
But with the price of Bitcoin back on an uptrend, things might get better for miners.
Soaring BTC prices and cheap electricity has been what is leading the hash rate to new all-time highs currently.
The 14-day mining hash rate has already climbed to a new all-time high of 127 Eh/s. This means the next difficulty adjustment, estimated to be positive 8%, within a week’s time could set a new record as well.
However, what has been pushing the electricity cost down is now leading to the drop of hash rate among major Chinese bitcoin mining pools.
The monsoon season in China brings abundant rain leading to cheap electricity prices. In the Sichuan province, which is estimated to account for more than 50% of Bitcoin’s total computational power, heavy rainfall is now affecting the operations. Molly, the head of marketing at HashKey Hub noted,
“The heavy rainfall in Sichuan is continually getting worse, caused internet blackout in multiple places in Sichuan, might cause bitcoin hashrate drop temporarily since over 70% of mining farms in Sichuan.”
And the hash rate has dropped significantly as per data from BTC.com, between 10% to 20% as bitcoin mining farms in the region are forced to unplug.
The three-day hash rate has already dropped 3% to about 123 Rh/s, and the one-day average fell 10% to 110 Eh/s.