Bitcoin Mining Difficulty Hit New High as Dry Season Draws Near in China
Bitcoin mining difficulty has set a new all-time high of 19.32 T on September 18. It is estimated that the mining difficulty will increase by 9.09% to 21.07 T in the next adjustment, according to BTC.com.
Suffering from the high mining difficulty, bitcoin miners there were then tortured by the dry season (starting from November). It forces up hydroelectricity costs and leaves bitcoin mining unprofitable amid the red chaos of the crypto market. After October, the power supply in Sichuan will be reduced by about 80%.
Data from OKLink shows that the network hashrate increased from about 123EH/s at the beginning of the month to 144.44EH/s on September 18.
On the one hand, the increase in network hashrate is due to the arrival of new machines; on the other hand, there are also some mining farms in the north that are gradually powered on. Therefore, it should be caused by the superposition of various factors.
In fact, there are only three ways for miners in Sichuan Province after the end of the wet season: first, turn off the machine, and then turn it on again in the wet season next year. Second, go far away to Kazakhstan and other areas where the power charge is cheaper. Third, migrate to north provinces like Xinjiang, Inner Mongolia for thermal power.
It can be seen that the decline of network hashrate in the dry season should be an inevitable event. In fact, in the whole wet season, even though the computing power has been rising, the old machines are still in the operation and will not be removed. The new machines are only increasing in small quantities. In the dry season, millions of old machines will not move northward, meanwhile, the capacity of new machines is limited, which is far less enough to cover the reduced computing power of old machines.
According to the current information about the chip end, it is expected that from the end of the year 2020 to the rainy season of next year, the slow delivery of some manufacturers will be fastened and enter a stable period. Therefore, the new increment in the first half of this year’s dry season will not be very large, and the overall significant increase should be seen in the rainy season next year. Of course, all this also depends on bitcoin prices.