BTC’s average hash rate drops below 125 EH/s, Sichuan region faces floods

Bitcoin's global hash rate has taken a hit today likely due to the flooding in Sichuan. Experts analyse the impact that the Sichuan region has on Bitcoin.

By · Jul 17, 2020 . 5min read

Photo by Clifford Photography on Unsplash

According to Quandl.com, Bitcoin’s global hash rate which measures mining capacity took a major hit today. It is suspected that floods in Sichuan region of China is the reason behind this. As of right now, the hash rate stands at 123.85 EH/s.

Bitcoins hash rate has always been vulnerable to the situation of Sichuan. Mining Bitcoin requires a lot of electricity. Hence, such mining farms tend to set up where the electricity is cheap. This is the case in Sichuan. The floods in the past have damaged or wiped out equipment within the mining farms in this region.

The hash rate has fallen over the last two days, citing the data derived from Quandl. It reached an all-time high just prior to that on the 15th July.

Some estimates suggest that China contributes anywhere from 50%-70% to Bitcoin’s hash rate. If this is the case then the entire Bitcoin space is heavily dependent on the operations there. However, some industry experts are skeptical of Sichuan’s influence. The drop in hash rate is initially measured by the number of blocks found, which is not always a consequence of the situation in Sichuan.

Are rains good or bad for miners in Sichuan?

Miners in Sichuan are usually optimistic about the rainy season. This is because during rains the electricity price tends to go down. However, there is a difference between precipitation and full-fledged flooding. The impact of rain in Sichuan on the global hash rate was so drastic between May and September last year. The hash rate rose from 48 million to 90 million terahashes per second during that time frame.

While China may be responsible for at least 50% of the Bitcoins hash rate, it is said that Sichuan contributes only about 8-10%. Therefore, some analysts think that Sichuan’s impact is exaggerated. In conclusion, if there are floods in Sichuan, the crypto space surely takes notice.

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