Bitcoin Hash Rate Takes a Hit as Miners Move with the Seasons

The Great Hash Rate Migration

In the lively world of Bitcoin mining, the end of the wet season in Sichuan has triggered a mass exodus of miners, akin to the great migratory ruminants of the Serengeti—if ruminants were blockchain enthusiasts wielding ASIC miners instead of hooves. Reports indicate an impressive drop, with around 22 exahashes per second (EH/s) vanishing from the Bitcoin network as the clouds clear in one of the world’s mining hotspots.

Understanding the Drop in Hash Rate

On October 26, a vibrant discussion unfolded over at Hashr8 led by Thomas Heller who pointed out that the Bitcoin hash rate plummeted dramatically. While experts like Kevin Zhang from Foundry casually estimated a decrease of about 20 EH/s, the numbers have left many scratching their head, wondering where exactly all that hashing power went. The previous day’s figure, 151.1 EH/s, dropped down to a mere 116.3 EH/s in a flash—one can almost hear the miner’s collective gasp.

Sichuan: The Mining Mecca

Sichuan has become a renowned territory in the mining community, praised for its rich supply of hydroelectric power, especially during rainy months. As the rains soak the dams and the rivers rise, miners flock to Sichuan like seagulls to a discarded french fry. But, just like a seasonal sale at the mall, once the rainy season wraps up, it’s every miner for themselves, heading off to other regions in search of cheaper energy sources.

• Estimated global hash rate impact: Sichuan held about 18.5% of it as of April 2020.
• Possible migration destinations: Xinjiang and Inner Mongolia, boasting 30.1% and 7.7% of global hash power, respectively.

A Historical Perspective

Historically, speaking of migration patterns, nearly 80% of Chinese miners previously made their way to Sichuan during the rainy season, as discovered in 2018. The drumbeat of migration didn’t stop there; data shared by CoinShares in December 2019 indicated that in certain months, a staggering 54% of global mining activity was orchestrated from Sichuan’s green energy abundance.

The Impending Difficulty Adjustment

But wait, there’s more! Heller signaled that a forthcoming Bitcoin mining difficulty adjustment is on the horizon, forecasted to drop by between 7.4% and 8.8%. Brace yourselves, fellow coin enthusiasts; if this prediction holds true, it could rank as 2020’s second-largest drop, right on the heels of the near 16% adjustment following the infamous ‘Black Thursday’ crash. Just when you think things can’t get any more exciting, the Bitcoin universe proves once again that it knows how to keep us on our toes.