- Following a 64% drop due to government bans, Bitcoin’s hashrate has slowly started to recover.
- After having touched 68.1186 EH / s on June 28, the BTC hashrate has recovered by touching 177 EH / s on August 23.
In this space we have mentioned on other occasions that the People’s Republic of China imposed new rules in the game of digital assets, preventing practically the mining activity in its territory.
To strengthen these actions Last April, the Chinese government indicated that it would not allow the enormous energy consumption of the country derived from this activity by hydroelectric plants to continue.
Let us remember that already last June, there was a record of reports that indicated that the government of the province of Yunnan was closing the mining farms of crypto assets in the area. Other regions joined the government ban, such as Xinjiang, Qinghai and Inner Mongolia, where mining operations were also completely closed as in Sichuan, where at least 26 projects that had something to do with mining digital assets have ceased activities. .
China’s crackdown collapses Bitcoin’s hashrate
China’s crackdown on miners led to a Bitcoin hashrate crash, given that a good number of miners were located in this country. In fact, it was speculated that around half of the Bitcoin hashrate could be directly linked to the People’s Republic.
According to the estimates of the CoinWarz portal, the lowest level of the last year was presented on June 28, touching 68.1186 EH / s.
It should be remembered that part of this reduction is due to the fact that there was a drop in the value of the Bitcoin asset, since the virtual currency was worth around $ 58 thousand dollars on May 9, a figure that fell to almost $ 34 thousand dollars on May 9. June 28th.
Knowing this, it must be taken into account that each time the price of the so-called “digital gold” decreases, it is less feasible to keep the mining machines that extract it running. That is why The 64 percent collapse in Bitcoin’s hashrate in a month and a half is easy to understand if we add the fall in the price of the crypto asset to the fact that many Chinese miners simply unplugged their equipment, completely suspending their mining activities.
Energy consumption of crypto mining
Certainly, what has been pointed out by the Chinese government is undeniable, since this digital activity consumes a large amount of electrical energy. Today it is estimated that this consumption is approximately 152 TWh per year.
If the estimates that a large part of the miners were located in the People’s Republic are taken for certain, that would mean that a large part of the hashrate was also located there, therefore, it means that a good part of that energy consumption was carried out in the country from East Asia.
Needless to say, the Chinese government has a great aberration for decentralized projects like Bitcoin, since it cannot control them, in addition to the fact that it is currently creating the optimal conditions to launch its digital currency emanating from its central bank.
Ban makes Miners disconnect or flee
With all of the above said, it is clear that the government issued a clear and concise warning to all those who are dedicated to the extraction of digital assets; andwill not be allowed this type of activities in Chinese territory.
It is well known that the Chinese government has considerable power in their nation, because the country is not a democratic nation, which is why many miners preferred to turn off their machines, suspend their mining activities or simply continue mining but from another country. , rather than looking for problems with the government of the People’s Republic.
Thus, some have moved to Kazakhstan, a nation that has oil reserves with which electricity is produced at low cost. Also, others moved to Canada or the United States, nations in which there has been real growth in Bitcoin mining.
It is because of that, Since the beginning of July, according to the estimates made by CoinWarz, the hashrate showed growth again, temporarily standing above 150 Ehash / s, only to return to around 130.
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