Mining Rigs Going Offline Lead to Hashrate Drop in November
The lower hashrate for Bitcoin was affected by the hash wars, but there is evidence that mining farms are retiring their equipment.
Bitcoin’s hashrate suffered a marked decline in November, and the reason may go beyond the Bitcoin Cash hash wars, which redistributed some of the hashing power. It could be attributable to the outright shut-down of mining rigs in a reversal of the ASIC arms race of the past years. The drop in mining activity comes at a time when Bitcoin (BTC) has started trading below $4,000, a rate deemed unprofitable for some miners.
CNLedger, a Chinese cryptocurrency source, has pointed to cases of selling mining rigs by the kilo.
It is uncertain whether the videos are recent, and some believe they belong to a previous crash in mining, which occurred when floods hit China in July and lowered the hashrate. However, the fact remains that miners’ output fell from 60 EH/s on November 1 to a low of 38.5 EH/s on November 22. At the time of writing, the hashrate has inched up to 44 EH/s.
The trend is noticeable among miners, ushering in another “crypto ice age.”
In the past three months, the growth in hashrate has stalled, ranging between 40 and 60 EH/s after months of exponential growth. In the past 30 days, the removal of mining operations has led to a 7% decline in difficulty, and in the past three months, downward difficulty adjustments came one after another.
A new difficulty adjustment will happen next week, with a lowering of 8.7% expected. Despite the higher probability of finding a block hash, miners are caught in the reverse trend of “follow the money.” It is unknown if the missing mining rigs would be shut down, sold, or kept dormant for better times.
During a bear market, miners may be hurt by more than depressed prices. They also lose the windfalls of unexpected uptrends, especially if they choose to hoard their rewards.
So far, BTC market prices have moved in various directions, but mining has continued to grow. The current downtrend arrives at a time when older mining rigs are also decommissioned while Bitmain’s newest models, the T15 and S15, are promising even higher hashrates. Yet demand for the new machines remains uncertain as digital assets continue to show signs of investors capitulating.
The loss of interest in mining may spell trouble for Bitmain, which is preparing for an initial public offering in the beginning of 2019.