Bitcoin (BTC) Hashrate Drops, Rumors of ASIC Fire Prove Fake

An unusually slow block and rumors of an ASIC farm fire coincided with another slight drop in Bitcoin hashrate.

The Bitcoin (BTC) network returned to slightly lower mining activity, down to 89 EH/s from a peak above 101 EH/s. The fluctuation is within the usual range, unlike the 30% drop in prices last week.

Bitcoin mining does not allow for exact reporting, and there may be anomalies in the hashrate. Still, the latest drop in activity was ascribed to a fire in an ASIC facility belonging to Innosilicon. Later, new information reported by Coinness showed that the actual event was a small grass fire that spread to a building, and no ASIC were destroyed.

At the time the hashrate fell, there were reports of $10 million’s worth of damage to the ASIC farm. Additionally, an unusually slow block was produced, as pools failed to discover a block for technical reasons at peak difficulty.

But what is more worrying, the Bitcoin network seems to be periodically losing a large number of nodes. Reachable nodes have fallen to 8971, down from a stable count around 10,000 nodes a few months back. In the past three months alone, the number of nodes has fallen by 1465 nodes.

The Bitcoin network uses cloud services to host some nodes. Falling prices may have discouraged node operators to keep up with the costs. But the loss of reachable nodes also holds the risk for censoring the network. The USA and Germany host the most active nodes, but about a quarter of nodes are distributed across the globe in smaller clusters.

The Bitcoin network still carries upward of 800,000 transactions per day, including unspent outputs, or “change” transactions, which doubles the number of interactions.

The BTC market price is mostly unaffected by hashrate, but the state of the network is watched for possible clues of crisis events that could lead to price damage. BTC is currently at $8,353.79, going though a relief rally from lows around $7,800. Still, the current price is not seen as promising another more extensive bull run.

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