F2Pool Founder Estimates 600,000 Bitcoin Miners Were Forced To Shut Down Because of Low Prices
Bitcoin mining is all about getting money, what happens when you stop to get money for your effort. Shixing Mao, the founder of F2pool, the third-largest Bitcoin mining pool in the world at the moment, has affirmed that about 600,000 Bitcoin miners simply decided to shut down operations in the last two weeks because of the mining crisis we are currently having.
Mao was originally interviewed by Coindesk, when he said that his company has ways to find out that older mining machines are struggling to have profits while mining because of the ever falling Bitcoin prices.
According to Blockchain.info, the Bitcoin hash rate has fallen from around 47 million tera hashes per second (TH/S) to only 41 million TH/s from a period that started on November 10 and ended on November 24.
F2pool, Mao affirms, has also seen a decline of 10% in its total hash rate in the last few weeks. Most of these miners, Mao believe, are in China. Why? Because of a combination. At the same time that the prices are falling around the whole world, the price of electricity has increased in China and old machines are not competitive anymore there.
People are having to sell these miners for recycling instead of selling them for other miners because no one is interested in this old hardware anymore.
The Winter Is Here And Another One Is Coming
Despite the metaphorical winter described by McAfee when he stated that people panicked and oversold Bitcoin, the real winter is coming in China and this is taking many miners out of the game. The main problem here is that, during the Winter, it is drier in China and it rains far less often. Because of this, water-based power plans make the electricity price go up.
With Bitcoin falling and going to below $4,000 USD, its 13-month low, machines that were being used in 2016 and 2017 are simply too slow to generate any profits anymore.
Bitcoin’s main chance to get is miners back is all about how dynamic the process is, though. With fewer people mining, the difficulty adjusts and it gets easier to mine. The last days have seen a decline in 5% in the difficulty.
Because of this, some miners who opted to continue might start to see more profits now, which will help to regulate the market in the end. However, we all know that Bitcoin mining will not be as interesting as it was before unless the prices get up and get out of the gutter.