Reports indicate that at least 600,000 Bitcoin miners have stopped operating their devices

Introduction to mining

Among the associated reasons that this incident has occurred is the fall in the prices of cryptocurrencies. The second could be, the low profitability offered by hardware manufactured between 2016 – 2017 and the third is the increase in the costs of electricity in China due to the arrival of winter.

A report published by the mining pool F2Pool indicates that between 600,000 and 800,000 Bitcoin miners have stopped operating their devices in the last two weeks of November, which has drawn the attention of the community because of the implications this could have for the operation of the network.

In this regard, the founder of F2Pool, Mao Shixing, shared his opinion during an interview conducted by an investors team. He said that the calculation comes from the data that is collected from various sources. Among these are the records of the drop in the HASH present in the network and the losses reported by the operators of older devices in light of the fall in Bitcoin prices.

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One of the sources from which most of the information was extracted is the Blockchain.info portal, which provides data associated with the operation of Bitcoin’s Blockchain network. It has to do with publishing indicators such as the level of HASH and the degree of congestion. The data reflected indicate that the power of HASH has fallen from 47 million to 41 million TH / s, registering the abrupt fall between November 10 and 24 representing a decrease of 13%.

According to the officials

Shixing explained that this was because many of the operators made use of older models for this activity. This is the same as the case of the Antminer T9 devices – manufactured by Bitmain – and the AvalonMiner 741 – developed by Canaan Creative. This happens because those models provide the estimate of about 10 TH / s, which generates losses in light of the current price of Bitcoin.

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At the level of F2Pools, Shixing reported that the volume of operations had fallen quite sharply in recent weeks. He went on to say that the HASH rate of the network has been reduced by more than 10% in the period.

Shixing added:

It is very difficult to calculate accurately the number of miners who have stopped operating with us, but we have seen that more than 10,000 users have stopped operating their devices — especially mining farms with which we had regular contact.

Among the factors that have led to the cessation of operations, Shixing said that miners with older devices are choosing to sell their hardware. This is so the hardware can be recycled and recovered to some extent the investment originally made. He also indicated that part of the whole controversy is associated with the recently made Hard Fork for the Bitcoin Cash network. As well as the fact that when winter arrives in China, the price of electric power usually increases.

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Other reasons cited by the administrator of F2Pools are the existence of new more powerful mining hardware in the market. These have led to the disincorporation of the oldest ones because they are not competitive enough. This, in turn, has worsened in the light of the fall in the price of Bitcoin, an aspect that affects the mining farms that operate with devices of the years 2016 and 2017.

To close, Shixing concluded:

All these factors mentioned above are combined at this time, which has led to operators no longer keeping their mining devices active.