China’s Bitcoin Mining Crackdown Cause BTC Hashrate to Fall 17%
The Bitcoin network’s hashrate slowed after authorities in China’s Sichuan province cut the power on 26 mining farms.
The amount of mining power backing Bitcoin dropped by nearly 17% overnight after authorities from China’s Sichuan province shut the power on 26 mining farms.
Falling hashrates can hurt Bitcoin’s price, based on historical price movement. In April, outages in Xinjiang cut Bitcoin’s hashrate by 30% and contributed to a $10,000 decline in Bitcoin’s price.
This time, Bitcoin fell 5.71% to $34,205, which is a much less pronounced dip than many of the top 20 coins by market cap, and given the current market volatility.
Some mining pools were hit harder by the shutdowns than other, more diversified pools. According to data from BTC.com mining pool BTC.TOP fell from the 11th to the 15th largest mining pool after losing 51.39% of its hashrate. Antpool.com, which is the largest pool, lost 14% of its hashrate.
The future of Chinese Bitcoin mining looks unstable, which is a big deal for Bitcoin. According to some estimates, about 65% of all the computational power backing the Bitcoin blockchain comes from China.
Sichuan in particular is very popular for much of the year. Miners there are powered by the excess cheap hydroelectric power generated by numerous dams.
For the remaining part of the year, several miners move to Xinjiang, where the cold weather cools down the miners that feast on coal-powered energy sources. That saves on electricity costs.
Amid China’s recent crackdown on Bitcoin mining Xinjiang ordered several crypto mining farms to shut down on June 9 – as part of several shutdown orders across the country.
China has reasoned the Bitcoin mining due to environmental concerns; waste of energy and produces nothing useful. But the real reason could well be that the use of the payments network is to help people get around surveillance states.
