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Crypto CEO: Bitcoin Needs Year to Recover From Chinese Crackdown

Bitcoin
(Image credit: Shutterstock)

Compute North CEO Dave Perrill told The Block that Bitcoin's hash rate—a measure of the computing power devoted to mining the cryptocurrency—might not recover from China's move to shut down crypto mining operations until some time in 2022.

"We may not see the hash rate go back to the all-time-high level until Q2/Q3 next year," Perrill told The Block. "That's my hunch." But, of course, he also expects Compute North to help with that recovery: The company, which hosts mining equipment for its customers, expects to have a total capacity of 1.2 gigawatts within the next year.

Blockchain.com data indicates that Bitcoin's hash rate peaked at 180.66 million terahashes per second (THps) on May 13. It quickly dropped as China's crackdown on mining operations expanded to more provinces in June, however, until it stabilized at 84.79 million THps on July 2. Now it's starting the slow climb back up.

Bitcoin's hash rate is likely to increase as Chinese mining operators sell their gear or move their businesses to more permissive countries. Mining the cryptocurrency has also become easier due to the decreased hash rate, which could inspire others to start their own mining operations, thereby increasing the hash rate as a result.

Efforts to mine Bitcoin using repurposed hydroelectric plants, volcanic energy, and other relatively clean sources of large amounts of power could also help the hash rate start to recover. But Perrill warned that for large-scale operations like Compute North, "it'd be a challenge, if not impossible, to be 100% renewable" at this time.

It took Bitcoin over a decade to reach the 180.66 million THps hash rate, it took less than a month for the hash rate to fall to less than 50% of that peak, and now Perrill has predicted it will take a year for it to climb back to its previous high. So now the question is how long it might be until the network comes up to another cliff.

  • bigdragon
    Other countries need to follow China's lead here and toss the cryptocurrencies out of their territories. This money game needs to come to an end. Attempting to move cryptocurrencies over to renewable energy sources doesn't stop the waste, fraud, and abuse.
    Reply
  • Blitz Hacker
    China's move over the crypto currency was because the government could not keep control of the currency and is pushing their own state based crypto. This had little to do with 'waste' or fraud and abuse.. And thinking there's no waste/fraud/abuse in fiat currency is simply just wrong. The cost for a decentralized world currency is little, especially moving to renewable sources of energy. Most of the comments I see that are anti crypto are usually people bias one way or another (can't get a gpu for their gaming rig) etc, which mostly is due to the semi conductor shortages. (mining and scalping doesn't help either but putting it solely on the shoulders of miners is irresponsible and naive)
    Reply
  • Kamen Rider Blade
    Death to CryptoCurrency!

    All Countries need to Strictly Regulate the way CryptoCurrency is powered and what hardware it's allowed to be used on.

    Any power consumption that is from the Public Electrical Grid should be banned.

    It needs to be run on Green Solar Power and on it's own private Grid using Solar Panels that nobody wants (China made Solar Panels effectively).

    And all hardware that CyrptoCurrency is run on should be everybody's trash PC hardware components that they don't want anymore, nothing even remotely new/recent within the last decade that somebody can use.
    Reply
  • Giroro
    There isn't really any compelling reason why the Bitcoin bubble would (or should) ever recover.

    On a long enough timeframe, the value of bitcoin and most crypto can only possibly converge to zero. It's unknown whether that will take a year or a thousand years (My guess is within 5-10 years, some smart researcher with access to a quantum computer owns the whole network for the lulz, but that's far from the only way to make bitcoin worthless).
    In the meantime, any short term gains are just noise in the margins.
    Reply
  • AtrociKitty
    bigdragon said:
    Other countries need to follow China's lead here and toss the cryptocurrencies out of their territories. This money game needs to come to an end. Attempting to move cryptocurrencies over to renewable energy sources doesn't stop the waste, fraud, and abuse.
    Regardless of how you feel about crypto, a lot of people now have a lot of real money invested. From your average person to institutional investors, portfolio exposure to crypto is at an all-time high. Why should the government have the right and ability to outlaw someone's wealth? If crypto fails on its own, then those investments will naturally fail, too. But hoping for state actors to make an asset class illegal is malicious and short-sighted at best.
    Reply
  • barryv88
    I HODL the most valuable asset on the planet today. It's the ultimate solution to financial freedom and getting to an earlier retirement. Hell, even a small "benefit of the doubt" amount can get you there if only you get started.
    I will watch as the mainstream media continue their drivel, blinded by their arrogance, persuading people out of crypto, not knowing that the world adoption rate of crypto keeps rising every year, at a greater pace.
    When the automobile industry fired up in the early 1900's, it could never be stopped or turned back. So will crypto continue onward.
    Reply
  • daworstplaya
    This sooner this fake money backed by nothing, produces nothing, provides no service dies, the better it is for everyone. If people put in real money to buy fake money and they lose it when it loses all value then it's a risk they took and their own fault.
    Reply
  • Why_Me
    The pyramid scheme takes yet another hit. :)
    Reply
  • cryoburner
    AtrociKitty said:
    When the automobile industry fired up in the early 1900's, it could never be stopped or turned back. So will crypto continue onward.
    Automobiles were actually useful for something. They were not just a less-efficient version of something that already exists.
    Reply
  • barryv88
    cryoburner said:
    Automobiles were actually useful for something. They were not just a less-efficient version of something that already exists.
    Pure BS. And you know it. The amount of development that went into crypto over the last 12+ years simply won't reverse and vanish. The world adoption rates increase every year. Please educate yourself.
    Reply