Bitcoin Mining Power Had Its Worst drop Since 2017
The Bitcoin Mining Power in the network, since April, has been presenting instability in its hashrate, suffering considerable drops that have made the mempool look saturated. Yesterday, there was a drop of about 40% in the hashrate, this being the worst drop since May 2017 , when it plunged 55%.
According to data from the Coinwarz portal , between June 9 and 10, the power of the network went from 178 EH / s to 107 EH / s. This drop slightly exceeds the one that occurred in April of this year , which meant a reduction of the hashrate of 37%.
Drops in the Bitcoin hashrate can mean that blocks within the network take longer to mine, causing a bottleneck in incoming transactions, resulting in increased mining fees.
In recent days, activity on the bitcoin network had slowed , emptying mempools and reducing commissions to an average of up to 1 sat / vbyte. After the drop in the hashrate, commissions have returned to an average of 18 sats / vbyte,
If the network begins to suffer agglomerations of pending transactions due to low computing power compared to the difficulty of mining, the commissions could increase further. If this scenario occurs, users will have to wait for the next difficulty adjustment period, or for the network’s hashrate to increase again, to see, again, lower commissions.
The recent drop occurred three days before the end of the next difficulty adjustment period. While the difficulty adjustment takes an average of the entire period of the previous 2016 blocks, this could mean that the decrease in mining difficulty will be slight for the next period.
China and the ban on cryptocurrency mining
The drop appears to be linked to recent Bitcoin mining bans in China’s Qinghai and Xinjiang provinces. This after the measures imposed by the Chinese government to combat the extraction of cryptocurrencies.
According to the report, the measures established against cryptocurrency mining are in favor of avoiding the indiscriminate consumption of energy from the burning of fossil fuels.
Some mining pools, such as Antpool, one of the most famous and used in China, recorded a drop in their hashrate of about 25% after the announcement of the closure of miners’ operations in China.
China accounts for 65% of global mining according to data from the University of Cambridge Bitcoin mining map, in its April update. In the last drop in the hashrate last April, the mother cryptocurrency had a decline in its price of about 14%, following Chinese Coal Mine accident, as reported by CriptoDefinance. However, in the last 24 hours, Bitcoin is positioned close to US$ 38,000, up 8%, at time of writing.
Disclaimer: The information expressed in this article are solely those of the author and do not necessarily reflect the views of CryptoDeFinance. Each and every investment and trading move involves high risk. You should always conduct your own research when making a decision in crypto investment. *with information from gogle, ebay, reuters, cnbc