Bitcoin Mining: switched off Up to 800,000 devices

the Between 600,000 and 800,000 Bitcoin Miner have been shut down since the beginning of the market turmoil in November on a temporary basis. What sounds like a Bitcoin-Exodus, is the natural reaction to falling prices and rising electricity. For the Miner, the to remain on the market, does the lower Hash Rate and a decreasing competitive pressure.

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On the 27. November 2018 share Facebook Twitter LinkedIn xing mail

On the difficulties of the Mining industry to do business in these turbulent times is still profitable, we reported on 22 March. November. The vague notion of "difficulty" seems to become more concrete now. As F2pool founder Mao Shixing tells in an Interview with CoinDesk, have been taken since mid-November, is estimated to be between 600,000 and 800,000 miners from the network.

The result: until the beginning of November, despite the bear market, ever-increasing Hash Rate, recorded in the Wake of the crash of the last two weeks of a downward trend. This is evident from the records of blockchain.com to judge

The graphics, is the Hash Rate of 30-day-High-at 4. November of about 54 million Terahashs per second (TH/s) to 41 million TH/s at 24. November like. This corresponds to a loss of about 15 percent of the Hash Rate within a period of only 20 days.

Mao, the loss of Hashing Power in the network is due above all to the fact that a large number of miners can be more profitable and therefore forced to take their devices from the network. This was particularly the case for Bitcoin Miner, which rely on the older and therefore less efficient ASIC Miner like the Antminer T9+ from Bitmain. These deliver according to the report, only a Hashing Power of 10 TH/s second. To little, to act in the light of the market turmoil profitable on the market.

Alone Mining Pool, F2pool are broken away in the last few weeks, about ten percent of the Miner. Although the exact number is difficult to estimate; Mao, according to the Mining Pool would have but after discussions with individual Mining farms "- tens of thousands of miners to the operation to adjust see".

Several factors

The Crash is not identified as the sole cause. Because of the increase in electricity would have to cost. These are due to shortage of water in Winter tend to be higher than in the summer. In the summer of miners calculate, therefore, with the equivalent of 0,029 US $ per kilowatt-hour (KWh) of electricity, while the price per KWh may rise in the cold months to up to is 0.043 US dollars per KWh.

Mao emphasized, however, that the Bitcoin Mining is a dynamic process. A switch-Off of the devices is often a temporary response to the market situation. The rates should rise again, could be the Break-Even Point for a wide variety of competitors available again. Then, according to Mao, it is also observed an increase of the Hash Rate.

Difficulty on the descent

For those who are already a little longer, is the direct connection between Hash Rate and Difficulty intuitively clear. For all others, should be noted at this point that a lower Hash Rate also has a falling Difficulty. The Difficulty is the dynamic measure of the "difficulty", so the amount of computing power, the need to raise the Miner to a new Block to propagate.

As you can see in the graph, has decreased the Difficulty since the middle of October constant. This in turn means that the remaining miners will have to overcome in the market, a lower threshold for Finding new Blocks, and therefore, on average, more likely to be able to propagate a Block.

This causality also sees Mao:

"The Change in the Mining Difficulty of Bitcoin is typically a delay of about 14 days [after a Change of the Hash Rate]. After the wave of shutdowns, the actors have decided to remain, perhaps a better life.“

No existential threat to great Player

Since the Rate of falling prices, as a rule, with a lower Hash, and thus also with a lower Difficulty correlated, are not able to recoup the large Mining Pools from a certain wealth of experience to the sometimes extreme fluctuations in the market get into trouble. That course crash for experienced Miner pose no existential threat, is also confirmed by Slush-Pool-founder Marek Palatinus in an Interview with Forklog:

"the price corrections since our establishment in the year 2010 a natural part of the growing Bitcoin Ecosystem. That is why we have experienced almost all of them and they have helped us to improve our money management and risk management measures over the years. The current Situation restricts our ability to grow faster, to a certain degree, it is not a serious threat to our financial health.“

The Bitcoin Miner should be excited about the current descent as little as the Rest of the scene; how Palatinus suggests, however, uses the industry-the crypto-Winter, in order to improve the infrastructure in the sense that they are positioned for the next Bull Run.

we are Bitcoin allow Yourself this short break. The Ecosystem is strengthened it.

If you have any questions about Bitcoin Mining, just have a look in our Tutorial.