BTC network hashrate rebounds to 100 EH/s, 2.3 million S9 mining machines may have been shut down

Original title: "Before Bitcoin halving: The epidemic accelerates the reshuffle of mining farms, will 16nm chips and S9 disappear? "
By Jamie Redman
Translation: Pingchuan

In 44 days, Bitcoin miners will face their third block reward halving, which will soon reduce block rewards from 12.5 bitcoins per block to 6.25 bitcoins. Following the market carnage in mid-March, BTC’s hash rate plummeted 44% to a 2020 low of 75 Exahash per second (EH/s). Since then, the hash rate has recovered to over 100 EH/s, but profitability on SHA256 networks like BCH and BSV is now extremely volatile compared to usual.

BTC network regains 100 Exahash

The third halving is just around the corner, and people monitoring the Bitcoin network have noticed that a lot has been happening in the SHA256 mining ecosystem.

The market downturn after March 12, triggered by the covid-19 panic, brought about a huge change in income for individuals and organizations mining Bitcoin. Bitcoin miners sold more Bitcoin than they produced. At the same time, the processing power of the BTC hash rate decreased by 44%, and the network difficulty also saw the second largest drop in history. Bitcoin is expected to halve around May 13, and now it is less than a month away from the BTC reward halving. Currently, the computing power of Bitcoin miners has successfully rebounded above the 100 EH/s mark.

At press time, BitcoinSV (BSV) miners have 2.4EH/s of hash power, with the network expected to halve in 10 days. There is about 3.4EH/s of hash power on the Bitcoin cash (BCH) network, with BCH miners facing a halving in 8 days. With the sharp drop in price and the accompanying drop in BTC difficulty, the time window on all three networks has been much longer as miners hop between networks in pursuit of profits.

Miners mining in the 2-3 most valuable SHA256 chains are moving back and forth based on the profitability of each chain. For example, from March 13 to 21, the profitability of BTC and BCH was quite good, with BCH being slightly better. Similarly, after March 21, the situation reversed and miners shifted hash power to BTC for a period of time. Since the halving of all three of the above is expected to occur in roughly the same time window, this gives speculators confidence that the rebound trend of miners will continue to strengthen.

The epidemic has accelerated the reshuffle of mining farms

The price drop affected all three SHA256 networks (BTC, BCH, and BSV), with many mining operations halted or acquired.

On March 18, DPW Holdings revealed that its subsidiary mining farm Digital Farms would be closed indefinitely due to the negative impact of the covid-19 outbreak. The company submitted an information update on the closure of operations to the U.S. Securities and Exchange Commission (SEC). The report stated that Digital Farms shut down 28 megawatts of power "due to unprecedented market conditions both domestically and internationally."

With the closure of Digital Farms, Hive Blockchain Technologies Ltd. (TSX.V: Hive) announced the acquisition of a mining company with 30MW of electricity. The mine is located in Laquette, Quebec, and uses "low-cost green energy." Frank Holmes, interim executive chairman of Hive, told the media: "This acquisition provides us with an advanced, operational Bitcoin mining facility that allows us to use the lowest-cost electricity on the planet and transition to the next generation of mining hardware." The Hive director further stated that "the facility is completely powered by renewable hydropower, keeping our global operations 100% green energy-driven."

About 74% of Bitcoin mining uses renewable energy

Just recently, Coinshares data and many other researchers reported that approximately 74% of Bitcoin mining operations are utilizing some form of renewable energy. Mining Bitcoin is becoming increasingly popular, and there are already many miners setting up shop in Montana.

The Cryptowatt plant pictured above (10.9 MW of capacity) is one of many Bitcoin mining facilities located in Montana. State officials would like to see all Bitcoin miners in the region utilize renewable energy.

Officials in Missoula County, Montana, proposed on March 27 to extend a guideline requiring miners operating in the state to use renewable energy. The proposal was unanimously approved by the Missoula County Commission and will be effective until April 3, 2021.

Are 16nm chips and S9 going to disappear?

Xing Meng from Securities Daily revealed in a recent research note that older miners like the Bimain S9 (14TH/s) may not be able to survive with Bitcoin prices so low and the upcoming halving. Mining company F2pool has reported that an estimated 2.3 million Antminer S9s have been shut down to date.

Data from Xing Meng and F2pool show that mining equipment based on 16nm chips, which have been the standard since 2016, is facing extinction. Despite this, recent adjustments to BTC difficulty have allowed 16nm chip-based hashing units like the S9 to continue working until the halving. Data shows that now, at $0.04 per kWh, an S9 with a hashing power of 14/THs will lose $11 per day. This data shows that for the S9 to continue operating after the halving, the price of electricity must be close to free.

Current concerns about the global economy, coupled with the upcoming SHA256 network halving, are sure to make things eventful for this secretive world. Signs of stress and large swings in mining profitability and hashrate suggest that miners may simply be doing what they can to survive. Competition for Bitcoin mining has become incredibly fierce over the past few years, and after the third halving, competition and pressure are likely to grow exponentially.

Source link: news.bitcoin.com