Floods in Sichuan China is Not Significant Enough to Cause A Drop on Bitcoin Hashrate
Floods in the Sichuan province in China causes vast damage to major cryptocurrency mining operations in this area due to the heavy rains on June 27th and June 28th. According to a local blockchain and crypto industrial media Golden Finance, the floods in Sichuan leads to a drop in bitcoin network’s hashrate.
According to sources, China accounts for nearly 70% of the world’s hashing power for bitcoin. As bitcoin mining needs low-cost electricity, majority of the mining rigs are centered in Sichuan, the “Bitcoin mining capital” in China.
Unfortunately, the heavy rain and floods have a significantly effect on crypto mining operations in Sichuan. Eric Meltzer, a partner at INBlockchain, one of the largest cryptocurrency investment firms in Asia especially in China, posted a photograph on Twitter which shows stacks of ASIC miners were affected by the floods, and those miner seem “almost impossible to repair”.
Based on the data provided by Blockchain.com, Golden Finance indicated that, the hashrate of bitcoin has dropped from 43 million TH/s to 30 million TH/s in the past few days, and has associated Sichuan floods with the drop in bitcoin network’s hashrate.
Meltzer also disclosed that local analysts believe that the combine of the floods in Sichuan and the increasing heatwave across Eastern Europe which causes low profit margins.
However, according to the data from the blockchain.com, from June 27 to 28, bitcoin hashrate actually increases during that period, which indicated that the flood does not have a significant effect on the bitcoin network.
In addition, even the flood destroyed a major mining facility in Sichuan, it should not be able to drive the hashrate of bitcoin to fall by 30 percent in such a short time, as bitcoin network uses the distributed ledger technology (DLT), which means there is no central point of failure.
A nature disaster may shut down a centralized network for few days while a decentralized network can still operated as usual, and that’s why bitcoin network has operated without any fault since 2009.