Chinese Crackdown on Bitcoin Miners Leads to Bitcoin Hashrate Dropping to Six-Month Low
With Chinese authorities cracking down on local cryptocurrency miners in the country, a large number of Bitcoin mining rigs have gone offline. The Chinese miners have either shutdown their operations or looking to relocate to overseas destinations.
This has led to a significant drop in the Bitcoin hashrate - the computational power required to unblock blocks and secure transactions in the Bitcoin blockchain.
The Bitcoin hashrate has recent ht a six month low, the levels last seen during November 2020. As per data on Blockchain Explorer, the Bitcoin hashrate currently is 127.86 million exahashes per second. Last month itself, the BTC hashrate touched an all-time high of 180 million rehashes per second. It means that just within a months time, the Bitcoin hashrate has dropped by more than 30%.
A higher hashrate is considered beneficial for the bitcoin network because it means that more resources have been devoted to the Bitcoin network for processing transactions. Besides, higher hashrate also ensures higher security for the Bitcoin network.
Some of the most crypto mining intensive regions in China like the Inner Mongolia, Xinjiang Uygur and Qinghai province recently announced shutdown for the local Bitcoin miners.
Some analyst have been predicting that as these Chinese Bitcoin miners complete their relocation, the BTC hashrate will once again start moving north. Amid the regulatory rout, a number of Chinese miners have considered relocating to other crypto-friendly nations.
The Latin American nation El Salvador which announced Bitcoin as a legal tender last week is already working on developing mining infrastructure with the clean geothermal energy from the country’s volcanos. El Salvador President Nayib Bukele said that work has been currently going on in this direction.
Miami city mayor Francis Suarez recently said that he is also exploring options to turn the city into a crypto mining hub by using the excess clean nuclear power generation in Miami.
The mayor added that Miami doors are open for Chinese miners who are currently finding a new home for themselves. “We want to make sure that our city has an opportunity to compete,” he said. “We’re talking to a lot of companies and just telling them, ‘Hey, we want you to be here,’” he said during an interview with CNBC.
There’s a lot of debate currently going around the energy consumption in mining Bitcoins. As a result, the overall crypto mining industry is making efforts to shift towards renewable mining solutions.