Bitcoin price crash forces miners off network

Bitcoin miners, particularly those in China, are feeling the brunt of the Bitcoin price crash.

According to data from Bitcoin mining pool F2Pool, the majority of mining pools have seen large drops in hash rate on their platforms. Hash rate is the amount of computation power that Bitcoin miners are expending to try to mine new Bitcoin while mining pools aggregate lots of smaller miners.

Crypto exchange Huobi’s mining pool saw the largest drop in hash rate, with a loss of 26% over the past week. 1THash wasn’t far behind it, with a drop of 20%.

The bigger mining pools saw smaller drops in hash rate. F2Pool saw a decline of 12%, Poolin, 18%, and Btc.com, 10%.

In fact, the global Bitcoin hash rate has gone down from 136 million tera hashes per second (TH/s) to 103 Th/s, in the same timeframe, according to data analytics site Blockchain. That’s a decline of 24%.

“Most hash rate lost was from China, I know this based on our own customers, plus seeing a lot of the Chinese pools (with more older gen machines) lose hash rate,” Thomas Heller, global business director at F2Pool, told Decrypt, “The more prepared Chinese miners with [Antminer] S9's have been selling large scale amounts of S9's over the past few months, primarily to countries with even cheaper power, such as Russia/CIS region, Middle East, etc.”

“With the prices where they are now ($4,600), more hash rate will go offline in the coming days/weeks, if the price doesn't turn around,” he added.

The main issue is that the drop in prices has made mining less profitable. Bitcoin mining profitability has fallen to $0.09 per TH, down 80% from a recent high of $0.44 in July 2019.

“It’s an extremely tough time for miners,” Heller said. And it doesn't look like that will end any time soon.