Bitcoin mining hashrate has been a topic for miners for a while. After months of incessant high-levels, recently, there has been a significant drop in the hashrate.
Recent reports from a publicly listed mining company revealed that the mining hashrate has fallen by almost 35% in the past 24 hours.
As per the organization, the decline is due to the current harsh winter storms in the United States forcing several miners to power off their machines. The figures reveal that the hashrate fell to 156 EH/s on Saturday. In the 14 days prior to the recent drop, the average hashrate was being measured at 237 EH/s.
The winter storms in the country have been very brutal and have led to cancellation of more than thousands of flights already. The effects of the storms, such as power outages, forced the Bitcoin miners in the area to stop their machines and thus their operations.
As per PowerOutage, a website tracking utility reports said that over 1.4 million homes and businesses are currently in dark i.e. in absence of power. The energy suppliers have been consistently requesting masses to conserve electricity and in such a scenario Bitcoin mining operations in the area taking a halt is no surprise.
However, as of writing, the hashrate has increased and has gained higher levels. Currently, it is valued at 247.87 EH/s.
Reportedly, the significant decline in the hashrate has raised questions about how centralized Bitcoin mining is and what it could mean in the larger picture for the network. Dennis Porter, chief executive officer of the Satoshi Act Fund, said that the network is working as designed.
He also compared the current mining scenario to the big tech companies such as Amazon and Google and noted that if about one-third of their data hubs went offline, the impact would be rather very different and massive. Further Porter, cited data center operator Lancium’s decision to shut its operation and opined that this shows that miners are good for the grid.
Ever since China banned Bitcoin mining last year, the US has taken an increasingly important role in Bitcoin mining. Texas has been serving as a favorable location for several miners given the availability of cheap power as well as amiable regulations. The mining firms in the region tend to shut down when grid demands increase massively.
At the same time, John Stefanop, founder of FutureBit, a company manufacturing mining hardware said that the hashrate going offline is due to highly centralized miners. According to him, the Bitcoin mining network is highly reliable upon weather, geopolitical disruptions etc. Further, he said that due to the ongoing weather conditions in the country, transactions are now 30% slower on the cryptocurrecy’s network.
Stefanop also criticized the concentration of miners in a certain area as it puts additional pressure on the miners. He said:
“If hashrate was distributed evenly around the world by 10’s of millions of small miners instead of a few dozen massive mines, this event would not have even registered on the network.”
Texas and the local authorities for long have been a big advocate of Bitcoin, mining and cryptocurrency in large. Ted Cruz, a senator from the United States, wants to turn Texas into a haven for Bitcoin (BTC) and other cryptocurrencies. The lawmaker expressed his understanding of how the cryptocurrency business may be vital for the US energy supply and technological advancement during a speech at the Texas Blockchain Summit 2022 in late November.