Between 600,000 and 800,000 Bitcoin Miners have been temporarily shut down since the beginning of the price turbulence in November. What sounds like a Bitcoin exodus is the natural reaction to falling prices and rising electricity costs.
For the Bitcoin secret miners who remain on the market, the lower hash rate also means decreasing competitive pressure
We already reported on the Bitcoin secret difficulties of the mining industry to operate profitably in these stormy times on 22 November: https://www.geldplus.net/en/bitcoin-secret-review/ The vague term “difficulties” now seems to be taking on concrete form. According to F2pool founder Mao Shixing in an interview with CoinDesk, an estimated 600,000 to 800,000 miners have been taken off the grid since mid-November.
As a result, the hash rate, which rose steadily until the beginning of November despite the bear market, has shown a downward trend in the course of the crash of the last two weeks. This is shown by the data from blockchain.com:
Judging by the chart, the hash rate has fallen from its 30-day high on 4th November from around 54 million terahashs per second (TH/s) to 41 million TH/s on 24th November. This represents a loss of about 15 percent of the hash rate in just 20 days.
According to Mao, the loss of hashing power in the network is primarily due to the fact that a large number of miners can no longer operate profitably and are therefore forced to take their devices off the grid. This is especially true for Bitcoin miners that still rely on older and therefore less efficient ASIC miners such as the Bitmain Antminer T9+. According to the report, these provide only a hashing power of 10 TH/second. Too little to operate profitably on the market in view of the price turbulence.
Mining Pool F2pool alone has broken away more than ten percent of the miners in recent weeks. Although the exact figure is difficult to estimate, according to Mao the mining pool would have seen “tens of thousands of miners shut down” after talks with individual mining farms.
Various cryptosoft factors responsible
However, the cryptosoft crash cannot be identified as the sole cause. There is also the increase in electricity costs: https://www.forexaktuell.com/en/cryptosoft-scam/ Due to water shortages, these tend to be higher in winter than in summer. In the summer, Miner calculate the equivalent of 0.029 US dollars per kilowatt hour (KWh) of electricity, while the price per KWh can rise to 0.043 US dollars per KWh in the cold months.
Mao emphasizes, however, that Bitcoin mining is a dynamic process. Switching off the equipment is often a temporary reaction to the market situation. Should prices rise again, the break-even point could be attainable again for a large number of competitors. Then, according to Mao, the hash rate will rise again.
Difficulty also on the downswing
For those who have been around a bit longer, the direct connection between hash rate and difficulty is intuitively clear. For all others it should be pointed out that a lower hash rate also results in a decreasing difficulty. The difficulty is the dynamic indicator for the “difficulty”, i.e. the amount of computing power that the miners have to muster in order to propagate a new block.