Bitcoin (BTC) Hashrate Drops Unexpectedly
A sudden drop in mining levels puzzled the markets, just as the leading coin sank by more than $1,200 in a day.
Bitcoin (BTC) lost more than price positions, as its mining fell suddenly from near-record levels, to a rate around 30% lower. It is uncertain what caused the drop, and whether it is a technicality of reporting.
Bitcoin hashrate fell from nearly 100 quintillion hashes, or 100 EH/s, down to 79 EH/s. The event happened right after the latest difficulty recalculation, which once again raised the difficulty level by 10.38%. The next difficulty recalculation is happening in less than two days, and the new lowered hashrate may stop the continuous climb of the difficulty. A lowered difficulty would allow miners to have a greater chance at discovering a block.
Another explanation for the sudden drop is a crackdown on mining in Mongolia, a favorable region for ASIC farms due to low temperatures.
China still holds the lead when it comes to mining, but Mongolia may also be a preferred location in the region.
There are also indications that Bitmain has expanded its mining operations, adding its own powerful machines to one of its subsidiary mining pools. BTC.com and Antpool still take 30% of blocks discovered, and are seen as having a disproportionate effect on the mining market.
With the growth of mining in the past quarter, Bitcoin’s network now uses more energy than Austria, at 73 TW/h per year. Despite the fact that Bitcoin miners use mostly hydroelectric power, the network still has a huge transaction footprint. With just around 300,000 transactions per day, one transfer of BTC produces more carbon emissions than 721,849 VISA transactions, estimated by the Digiconomist Bitcoin energy index.
There is another worrying trend on the network. In just three months, the count of reachable Bitcoin nodes fell from 10,021, to 9,403. The reason for the loss of nodes is unknown, and may be due to connectivity issues or other forms of censorship between node connections. Loss of nodes could also be due to local operations deciding to shut down.