Bitcoin hash rate hits 8-month low as mining operations shut down in China
Bitcoin’s hash rate has fallen down to the lowest levels since early November as mining operations in China start shutting down.
According to Bitinfocharts, Bitcoin hash rate is currently 91.2 EH/s, close to half of its 171.4 EH/s high posted less than six weeks ago. The network’s hash rate has slumped 46% since its peak level in mid-May. BTC hash rate has not been at this low level for 8 months, last creeping below 90 EH/s on November 3, 2020.
Bitinfocharts has also reported a drop in mining profitability from a peak of $0.449 USD per day per terahash per second to current levels of $0.226 over the same pe.
The higher hash rate represents higher competition among miners to validate new blocks, also increasing the scale of resources required to perform a 51% attack and thus making the blockchain network more secure.
The downfall in hash rate and mining profitability is due to the major mining pools in China’s Sichuan province being shut down following Chinese authorities’ call. Back in 2019, CoinShares estimated that Sichuan hosted more than half of the global hash rate, attracting miners with its cheap and seasonally abundant hydropower.
On June 12, Yunnan provincial authorities also issued a notice ordering an investigation into the alleged illegal use of electrical power by individuals and companies involved in Bitcoin mining.
According to a CNBC report published on June 15, Castle Island Ventures partner Nic Carter noted Bitcoin’s hash rate was dropping. He said, “it appears likely that installations are being turned off throughout the country.” Carter predicted at least half of Bitcoin’s entire hash rate will leave China over time.
North America, particularly the state of Texas, has become one of the top destinations for what has been dubbed the “great mining migration” due to favorable legislation and an abundance of low-cost renewable energy.