After experiencing a temporary 38% drop to 170.60 EH/s from a weekly peak of 276.40 EH/s, the Bitcoin network hashrate has returned to its previous level of 241.29 EH/s.
A temporary drop in the hashrate of the Bitcoin network was caused by freezing temperatures across the United States, which put a strain on the nation’s electricity grid. This strain caused the hashrate to temporarily drop, but it has since returned to normal levels.
A wave of bone-chilling temperatures swept across the United States in the days leading up to Christmas, leaving millions of people without power and claiming at least 28 lives.
It has been reported that Bitcoin miners in the state of Texas, which is responsible for a significant portion of the hashrate in the country, have voluntarily reduced their operations in order to return power to the grid. This is done so that residents can continue to keep their homes warm.
It would appear that the disruptions caused a dent in Bitcoin’s hashrate, which typically ranges from 225 to 300 Exahashes per second (EH/s). On December 25 it had decreased to 170.60 EH/s.
The hashrate, on the other hand, has returned to 241.29 EH/s as of the 26th of December, as indicated by the data from the hashrate mining calculator CoinWarz.
The number of hashes generated by Bitcoin miners while they work to solve the next block is what is used to determine the cryptocurrency’s hashrate. It is widely considered to be an important metric to use when determining how secure the Bitcoin network is.
The recent occurrences prompted the founder of FutureBit, John Stefanop, to make a controversial statement. In it, he suggested that the drop in hashrate was due to a number of “highly centralised mines” in Texas turning off at the same time.
“I know, doesn’t change the fact that a few large mines in Texas affect the entire network to the tune of 33%…everyone’s transactions are now being confirmed 30% slower because the hashrate is not decentralised enough,” he said. “I know, but that does not change the fact that a few large mines in Texas affect the entire network.”
“If hashrate was distributed evenly around the world by 10’s of millions of small miners instead of a few dozen massive mines, this event would not have even registered on the network,” added Stefanop. “Instead of a few dozen massive mines, there would be tens of millions of small miners.”
However, Bitcoin bull Dan Held disproved Stefanop’s interpretation of the events by arguing that weather patterns do not indicate centralised ownership or control.
The United States is responsible for 37.84% of the average monthly hashrate share, as reported by the Cambridge Bitcoin Electricity Consumption Index. New York, Kentucky, Georgia, and Texas are the top four states in the country for Bitcoin mining. All four of these states had power outages as a result of the winter storm.
However, Dennis Porter, the CEO of Bitcoin mining advocacy group Satoshi Action Fund, noted on December 25 to his 127,400 Twitter followers that even though the inclement weather, particularly in Texas, caused 30% of Bitcoin’s hashrate in the United States to go offline, the network “continues to work perfectly.” Porter made this statement despite the fact that the hashrate in the United States was affected.
In recent months, Texas has experienced a boom in Bitcoin mining as a result of the state’s inexpensive power and favourable mining regulation. As a result of this boom, Texas is now home to some of the largest mining companies in the world.
Included in this group are Riot Blockchain, Argo, Bitdeer, Argo, Compute North, Genesis Digital Assets, and Core Scientific, all of which have recently been granted a bankruptcy loan totaling $37.4 million in order to remain in business.
However, recent weather events have only added to the growing list of problems that Bitcoin mining companies are facing.
According to the most recent data, the bear market has caused Bitcoin mining companies to rack up debt totaling $4 billion as a direct result of its effects.
In the past few months, a number of notable mining companies based in the United States have also filed for bankruptcy. At the same time, a large number of other companies are approaching debt-to-equity ratios that are nearly impossible to overcome and require immediate restructuring.
The unfortunate weather conditions have not yet had an effect on the price of Bitcoin (BTC), which is currently trading at $16,826 and has only decreased by 0.27 over the course of the previous 24 hours.