After sustained increases over the past three months, hashing power on the BTC network dropped as the summer rainy season end in China.
According to data from Poolin, BTC’s seven-day average computing power dropped from 97.90 EH/s to around 90 (EH/s) since Oct. 24. Poolin’s co-founder Chris Zhu stated in a recent WeChat post that one main reason for the decline is obviously the gradual end of this year’s rainy season in China.
Some hydropower stations in China’s Sichuan province no longer have the capacity to generate enough energy to support crypto mining activities. Crypto miners without sufficient hydropower supply would have to shut down their operations. The alternative is to relocate to other provinces like Xinjiang or Inner Mongolia, where mining farms have a stable, but more expensive power supply generated from fossil fuel plants.
The drop signals that some miners have unplugged from the BTC network. Previously, it had been estimated that the BTC hash rate would go above the 100 EH/s threshold by the end of the year. As a result of the power drop in the network, data from mining pool service BTC.com predicts that bitcoin’s difficulty will decrease by 1.5 percent when it’s set to change in about seven days.
BTC’s mining difficulty had reached an all-time high at 13.69 trillion on Oct. 24, following a 38 percent increase since early August. The rise was attributed primarily to an increase in miners’ hashing power made possible by the abundant and inexpensive hydroelectricity in China’s southwestern provinces.
Hashage’s CEO, Xun Zhen, echoed Zhu’s comments. Zhen added that even if some still can find a hydropower resource, the cost has gone up from $0.04 per kilowatt-hour (kWh) in the summer to around $0.05 now.