One of the largest mining pools reports that since mid-November, from 600 to 800 thousand miners ceased to mine bitcoins due to a sharp fall in its prices and hashrate across the network.
F2pool founder Mao Shixing said said his firm’s estimate takes into account the total network hashrate drop and the average hash power of older mining machines that are having a hard time generating profits. Blockchain.info published data according to which, the total hash rate of the bitcoin network fell from 47 million tera hashes per second (TH/s) to 41 million in the period from 10 to 26 November.
According to Shixing, most of the miners who ceased their activities, are using outdated device like Antminer T9+ by Bitmain and AvalonMiner 741 by Canaan Creative. The profit index of miners F2pool shows that this equipment has an average hashing power of 10 TH/s. The bitcoin hashrate on F2pool, which now accounts for about 11.4 percent of the total network, has also seen a decline of over 10 percent in recent weeks.
"It’s hard to calculate a precise number of miners connected to us that had unplugged. If we consider some large-scale farms, over the past few days network left tens of thousands of miners. This is the situation with mining in China to date".
November 20 Shixing published in his profile on the social network Weibo photo, where a man was packing computer gear into boxes. Mao signed the picture: "shutting down is not an option, now have to sell by the kilos". Many took this post as a sign that even the latest equipment is no longer relevant. Subsequently, however, Shixing admitted that it was only a joke:
"Those miners being sold by the kilos is outdated. People are selling them for recycling for copper, because that models that aren’t usable anymore".
Shixing noted several factors that contributed to the problems of the miners. He called the recent recession the cryptocurrency market, resulting from hard forks of Bitcoin Cash, the increase in electricity tariffs in China and the desire of local enterprises to continuously improve products, thereby turning the old mining equipment into a useless stuff. According to Shixing, all these factors provoked the recent drop in hash rate yet.
Shixing also said that due to the fall in Bitcoin value below 4 thousand dollars, a mining farms that have been using machines made in 2016 and 2017, just can’t break even. However, disabling miners from the network does not mean that they decided to permanently cease operations.
Shixing argues that Bitcoin mining has always been a dynamic process, meaning when the hashrate drops, so does the mining difficulty. According to the latest data, the difficulty of bitcoin mining has decreased by 5% in the last few days, that may give some benefits to those miners who remained in the network.