November 26, 2022

Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners

4 min read

The excellent Bitcoin miners migration is well in progress. And the network’s total hash rate is showing it in a huge method. Presently, the variety of terahashes per second is at its most affordable level in the last twelve months. That means that mining Bitcoin has not been easier in an entire year. Likewise, there’s less competition. So, it’s great news for all the other miners that are spread around the world. Nevertheless, don’t expect it to last long.

Related Reading|How China Bitcoin FUD Is Lowering The Cost To Produce BTC

Heaps and lots of mining devices are presently traveling to their new homes. There are reports of a substantial operation in Kazhakstan, a nearby nation of China. There are also rumors of equipment and personnel currently calming down in Texas. The United States state is making a push to become a Bitcoin mining capital, and apparently, the efforts currently bore fruit.

Back in China, the crackdown is no longer a rumor. It’s a reality. CNBC reports:

China’s crackdown magnified over the weekend, with authorities in the hydropower-rich Chinese province of Sichuan buying crypto miners to close down operations.

According to reports, more than 90% of China’s bitcoin mining capability is approximated to be closed.

Some professionals see this as a good thing. It’s estimated that China controlled between 60 and 70% of Bitcoin mining, and the future looks clearer with them out of the photo. The hash rate will suffer for a while, however there’ll be more decentralization. Likewise, the carbon-powered-energy consumption FUD will decrease. Despite the fact that China’s miners were mostly situated in locations abundant in renewable resource, Bitcoin critics had a tough time believing reports from that side of the world.

Total Hash Rate (TH/s)of the Bitcoin network|Source

: Another China Ban, A Reflection Of 2017 This is not the very first time that the Chinese government's cryptocurrency policy caused havoc on the marketplace. In September 2017, they banned crypto exchanges completely. Right before that, Bitcoinist reported:

While Chinese exchanges used to represent over 90% of Bitcoin's trading volume, this changed completely with the intervention of the PBoC which resulted in completion of margin trading and zero-fee policies and to the short-lived stop on withdrawals.

All of these changes added to China's trading volume decrease, which saw its market share fall to 3-5% of the global trading volume.

So, historically, the Chinese federal government has actually revealed no grace in closing billion-dollar businesses by decree. It's likewise worth noting that the majority of the banned cryptocurrency exchanges simply closed their China workplaces and moved their operation to other countries. They continue working to this day and, for users not in China, the traumatic move didn't impact their experience in the smallest. Bitcoinist reports once again:

The clampdown led to a shocking drop in CNY trading —-- which comprised over 90 percent at its peak —-- as traders made an exodus to over-the-counter, peer-to-peer, and foreign exchanges. As an outcome, jurisdictions with friendlier laws experienced a boom in trading volume as the marketplace turned on its head

The present scenario with the miners is a reflection of that. The mining business is in the procedure of turning on its head. The hash rate will recover.

BTCUSD price chart for 06/25/2021 - TradingView

 BTC price chart on Bitstamp|Source: BTC/USD on The Hash Rate Will Rise Again

In retrospect, we ought to've seen it coming. Only two months back, following a suspicious blackout, NewsBTC reported:

According to the Beijing Economic and Information Bureau, there were issues about the energy intake associated to these activities. PengPai prices estimate Yu Jianing, turning Chairman of the Blockchain Special Committee of China, to declare that the nation's environmental requirements might lead to crypto mining being more “& ldquo; strictly managed”& rdquo;. Jianing stated this will be “& ldquo; unavoidable &

rdquo;. Related Reading|Bitcoin Mining In China To Usher Historic Moment, Will BTC Be Affected?

When it comes to the possible reasons, Bitcoin Magazine's Lucas Nuzzi points out the upcoming Digital Yuan CBDC. He likewise defuses the FUD by informing us, “& ldquo; Daily Hash Rate is, by its very style, a volatile metric that is not appropriate to track enduring modifications in the mininglandscape. & rdquo; 2/

We need to likewise take into consideration Nic Carter's assertion that all of these things are occurring while, “& ldquo; Bitcoin continues to keep 100% uptime, is absolutely nothing short of a modern marvel.”

In Bitcoin, everything's changing while everything remains the same. The hash rate will rise again.

Featured Image by OpenClipart-Vectors from Pixabay - Charts by TradingView and