Bitcoin’s network hash rate has dropped this week. Over the past 24-hours, the cryptocurrency has lost over 40% of its hash rate and was down to figures last seen in November 2020, according to the latest chart by Blockchain.com. the seven-day average of Bitcoin’s total network hashing power slid close to 127 EH/s on Friday. Since then, it has noted a minor recovery and was currently found to be at 130.28 EH/s.
Hash rate is essentially the total amount of computational power used to mine and process transactions on the BTC blockchain. Hence, the greater the hashing power in the network, means more resources are devoted to processing transactions, hence, more security and resistance to attack by malicious entities.
Bitcoin hash rate:
In recent times, however, the hash rate dropped amidst several reports about crackdowns in China linked to BTC mining operations across various provinces due to tighter regulatory scrutiny. Several prominent Chinese bitcoin mining pools are facing further drawdown in terms of hash rate after Sichuan ordered a state-owned power grid to slash the energy supply for 26 local mining farms initially. Currently, almost 15 large BTC mining pools by real-time computing power are witnessing a considerable plunge in hash rate drop.
In addition, China-based, 1THash, which happens to be one of the world’s largest mining pools, shed almost 70% of its hash rate last week.
Community reactions to hash rate drop
Several notable figures in the space speculated that there will not be any long-term consequences since. They are of the opinion that the Bitcoin hash rate will eventually flip after the network miners shifts their base from China to other regions
Hashkey Group’s Molly tweeted,
“We gonna witness a history in bitcoin mining tonight, all mining farms (about 8m kw electricity load) will shutdown at 12pm Beijing time tonight, Harare rate already dropped significantly after sichuan gov announce shut down bitcoins mining farms in Sichuan.”
Despite the low figures, many of the proponents were not worried about the network at all. Castle Island Ventures Partner, Nic Carter, for one, called the infrastructure a “modern marvel” and tweeted,
“Bitcoin’s hashrate transition, in which >50% of its industrial base (representing $15-20b in ann. revenue) leaves China and becomes globally dispersed, while Bitcoin continues to maintain 100% uptime, is nothing short of a modern marvel. Name another industry that could carry out an infrastructural transition that seamlessly within a year. It’s astonishing”