600K Bitcoin Miners Shut Down in Last 2 Weeks
As the crypto-currency market suddenly dropped down to lowest, the reaction to this is that nearly 600K Bitcoin miners shut down in the last 2 weeks. According to third largest mining pool F2Pool, between 600,000 and 800,000 bitcoin miners shut down their businesses. All those businessmen have shut down at a rapid pace and it is done so by mid-November. You mightbe thinking why is it happening?
Why Have Bitcoin Miners Shut Down?
In addition to it, in an interview with CoinDesk, founder of F2Pool, Mao Shixing said that his firm estimate takes into account the total network hash rate drop. In other words, due to the total network hash rate drop and average hash power of older mining machines, miners could not generate profits. According to data displayed at blockchain, info, the bitcoin network’s entire hash rate has dropped from around 47 million tera hashes per second on Nov. 10 to 41 million on Nov. 24. This decline is almost 13 percent of the network.
Mao explained the reason that most miners may have halted operations because they were using older models. These older models are as the Antminer T9+ made by Bitmain and AvalonMiner 741 by Canaan Creative.
In other words, these miners have an average hash power of around 10 TH/s and according to the estimation, they are losing money right now. F2Pool miner revenue index provided this information. In addition to it, bitcoin hash rate on F2Pool accounts for about 11.4% of the total network. It has seen a decline of over 10% in recent weeks, according to Mao.
“In his other words, it is tough to calculate a precise number of miners attached to us that had unplugged. But we observe over tens of thousands of them shut down their business in the past several days. We get this information based on the conversation we had with larger farms that are in regular contact with us.”
On Nov. 20, Mao also shared via social media platform Weibo that a photo of a man packing computer gear into boxes, with the title “shutting down is never an option, now have to sell by the kilos”.
What Factors Are Contributing to the Shutdown of Miners?
Mao explained that there are multiple factors contributing to the shakeout of miners. One of the factors includes the recent market decline that followed by the Bitcoin cash hard fork on Nov. 15. Another factor is that an increase in electricity cost in China in the winter season. In addition to it, Chinese manufacturers are still racing to advance their products, to make older machines uncompetitive.
Therefore, when winter comes in China, hydropower plants experience a dry season. The electricity
costs have been doubled from what it was in the summer.
In addition to it, bitcoin price tanked to a 13-month low to below $4,000. After all, mining farms were
using machines made in 2016 and 2017 with lower efficiency. But to be sure, the unplugged mining
farms do not necessarily mean that they are out of the game completely.
It is considered that Bitcoin mining is a dynamically adjusted process. It means that when the hash rate
drops so does the difficulty in mining. In addition to it, the latest data shows that the bitcoin mining difficulty has declined by 5% with the past few days.
As it is always hard to calculate what will be the crypto-currency market trend in the future. The news
that is heart reckoning is that nearly 600K bitcoin miners shut down in last 2 weeks. But you do not
need to worry, the market trend keeps on changing.
In other words, this blockchain technology is the future of Bitcoin and it is just the start. In the future it
is estimated that this blockchain technology product will increase in features and will provide multiple