BTC price going down due to the end of the summer rainy season in China and mining facilities lose their hydropower. Commentary by Xun Zheng and Chris Zhu.
As summer and rainy weather lives China, the Bitcoin network sees immense drawback within its computing power.
According to the Bitcoin mining pool Poolin, Bitcoin has dropped in hashing power to 90 exahashes per second since 24 October 2019. This is a result of miners going away from the network. It was predicted that the hash rate of BTC might go up to 100EH/s by the end of this year.
As the power drops, market value of the mining rewards will decrease by 1.5%.
The mining difficulty of Bitcoin reached its top at 13.69 trillion on the 24 October. This difficulty results of every 14 days, based on hashing power increasing and declining.
The co-founder of Poolin Chris Zhu stated in a WeChat post that the end of the rainy weather in China is near. Hydropower stations in China that make up 50% of the BTC global computing power but don’t have the energy for supporting mining.
Miners without hydropower supplies have to shut operations or simply relocate to more stable mining farms that take power from fossil fuel plants.
The CEO of Hashage, Xun Zheng commented similar to Zhu that the hydropower resource’s costs have gone up from 4 cents (kWh) in summer to 5 cents.
BTC’s price dropped on 23rd October to under 7,500 dollars and this could have ended up to shutting down older mining models like AntMiner S9. Its profitability and the profitability of the rival mining models can be crucial to their lifespan.
The electricity in China goes up during winter and the costs, so this can place a serious effect over mining and the halving of the mining rewards in 2020.
According to a miner index, BTC’s price and the electricity costs of 5 cents (kWh), the mining profit of models like AntMiner S9 is about 30%.
INBTC a sister company of Poolin is trying to extend the lifespan of S9 by merging units in one for a high rate of hashing power over electricity. Two units can provide higher profit margin, but this continues to be proven as a sufficient method for adoption.