According to Mao Shixing, around 600,000 to 800,000 Bitcoin miners have shut down over the past two weeks. This follows the ongoing crypto market meltdown that has a seen the prices and the hashrate across the network decline.
The statistics are an estimation from F2Pool, the third largest BTC mining pool. They also take into account the average hash power of older mining machines which have found it difficult to generate profits.
Many Factors Have Contributed To The Shutdown
Data from blockchain.info indicates that from Nov. 10 to Nov. 24 the entire bitcoin network hashrate dropped by 13 percent from 47 million tera hashes per second (TH/s) to 41 million. The hashrate captures the aggregated computing power of the whole bitcoin network.
Shixing explained that most miners who have halted their operations are mostly those using older models like AvalonMiner 741 by Canaan Creative and Antiminer T9+ by Bitmain. Both machines have an average hash power of around 10 TH/s. They are estimated to be currently losing money according to F2pool’s miner revenue index.
F2pool bitcoin hashrate which accounts for 11.4 percent of the entire BTC network has also declined by over 10 percent in the past few days.
Speaking to CoinDesk, Shixing said:
“It’s hard to calculate a precise number of miners connected to us that had unplugged. But we saw over tens of thousands of them [shut down] in the past several days based on conversations we had with larger farms that we are in regular contact with,”
“This is what’s happening among miners in China.”
However, Shixing notes that several factors have contributed to the shutdown among miners. He cites the recent decline in price as a result of the Bitcoin Cash hard fork and also the increase in electricity price in China. He adds that most Chinese manufacturers are also racing to upgrade their products since older machines are becoming increasingly uncompetitive.
Most importantly, winter is coming to China, and hydropower plants in the country are starting to experience a dry season. As a result, the electric cost had doubled compared to the summer when water was abundant.