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Bitcoin Hashrate Rebounds After China's Mining Operations Were Shut Down

Bitcoin
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Bitcoin's hashrate is recovering from the Chinese government's crackdown on mining operations, according to data from Blockchain.com, which put the hashrate at approximately 127.26 million terahashes per second (TH/s) as of August 23.

China used to be responsible for most of the computational power devoted to Bitcoin. In July, the Cambridge Centre for Alternative Finance said that China accounted for 46% of Bitcoin's hashrate. The U.S. had a 16.8% share; no other country managed to make even a double-digit contribution to the hashrate.

That meant Bitcoin's hashrate plummeted when Chinese mining operations were forced to shut down. Blockchain.com's data showed the hashrate peaking at 180.66 million TH/s on May 13, but by July 2, it had dropped to just 84.79 million TH/s. The network wasn't expected to recover until China's mining operators left the country.

This led Compute North CEO Dave Perrill to say Bitcoin's hashrate wouldn't reach its peak again until the second or third quarter of 2022. Blockchain.com's data suggests the recovery is going much faster than expected, however, and CoinDesk reported that Glassnode metrics also show the hashrate rebounding by 25% in recent weeks.

Why is the hashrate recovering so quickly? Unfortunately, neither analytics provider can explain. It's possible that Chinese mining operators have moved to other countries faster than many anticipated; it's also possible that other miners have rushed to fill the void those companies left following China's crackdown.

Either way, it seems that Bitcoin will bounce back from the loss of those Chinese mining operations more easily than expected. Of course, it probably doesn't hurt that the cryptocurrency's value has rebounded, too, which gives wannabe miners even more incentive to invest in the equipment they need to earn themselves some Bitcoin.

  • Integr8d
    Hmmm… Even China couldn’t stop it.
    Reply
  • Geezer760
    Why can't they just make a GPU for just gaming and a GPU for just mining?
    Reply
  • watzupken
    Integr8d said:
    Hmmm… Even China couldn’t stop it.
    How can a single country stop it just by means of banning it on their shores? In this case, the rebound is to be expected because big time miners that got "evicted" out of China will quickly set up shop in another low cost location to continue mining. Given the high price of Bitcoin/ cryptocurrencies, there is a lot of incentive to quickly pick up the slack. And big time miners have the financial backing to quickly relocate.
    Reply
  • watzupken
    Geezer760 said:
    Why can't they just make a GPU for just gaming and a GPU for just mining?
    Isn't this what Nvidia is trying to do? But realistically, do you think that really helps? Say if 100 GPU comes out of the factory, part of it goes to gamers and part of it to miners. At the end of the day, its a zero sum game. So if Nvidia chooses to allocate 70 to 80% to miners because they earn more, that leaves gamers with just 20 to 30% of the GPUs.
    Reply
  • TJ Hooker
    Geezer760 said:
    Why can't they just make a GPU for just gaming and a GPU for just mining?
    In the case of bitcoin, they are already using custom mining ASICs, rather than GPUs.
    Reply
  • Geezer760
    watzupken said:
    Isn't this what Nvidia is trying to do? But realistically, do you think that really helps? Say if 100 GPU comes out of the factory, part of it goes to gamers and part of it to miners. At the end of the day, its a zero sum game. So if Nvidia chooses to allocate 70 to 80% to miners because they earn more, that leaves gamers with just 20 to 30% of the GPUs.
    So in other words what your really saying is gamers are screwed.
    Reply