By Shelly Melancon (Switzerland)
Since Ethereum’s hashrate reached peak levels in the middle of last month, it has declined by over 26% since that time. The leading cause remains the continuing crackdown on Chinese miners by the Chinese authorities which has caused the mass exodus of miners from the south Asian country.
Bitinfocharts report that Ethereum’s hashrate peaked about 586 TH/s (tetrahashes per second) on May 21. A few weeks later, it has declined to a 90-day low of 435.2 TH/s. Historically, this is the fastest decline in Ethereum’s hashrate. Less than seven weeks after hitting an all-time high peak rate, it has declined, and within the last ten days alone, it plummeted by 18%.
A Glassnode analysis reveals that this is the sharpest drop within this short period in Ethereum’s history. Ethereum’s hashrate previously declined three years ago. Even though it declined to about 58% that time, the fall spanned months and not weeks as seen this year.
Rough Months Ahead for Ethereum Miners
The hashrate is an assessment of any network’s computing power, and in the case of Ethereum, it is directly proportional to its price. The higher the value of Ethereum, the more profitable its mining becomes. Hence, more miners are attracted to the network, which enhances the hashrate.
Also read:The editorial director at compass mining (a bitcoin mining company), William Foxley, opined that it is more difficult to suppress Ethereum mining than bitcoin mining. He argued that Ethereum mining is based on the mining computers’ graphics processing unit (GPU), while bitcoin mining involves using large-scale application-specific integrated circuits (ASIC).
During a recent interview, Foxley stated that “GPUs can be put in small places and less likely to be found even during an intense raid.” Foxley further added that “this isn’t the best of times for Ethereum miners in china. They are moving out of a familiar industrial territory after bearing reduced fees due to EIP 1559.”
Since the notice of eviction to crypto miners in china, Sparkpool’s hashrate has dropped by almost 31%. Sparkpool is a china-based Ethereum mining pool, and it is the second-largest in the country. There might no longer be any Ethereum mining operation once the switch to Eth 2.0 and its proof-of-stake is completed. The next few months could be challenging for Ethereum miners.
Small Hydropower Stations Now Selling at Meager Prices
Meanwhile, the South China Morning Post (SCMP) has revealed that most eCommerce sites in the country are inundated with ads for selling small hydropower plants. The price for installing power plants has plummeted seriously ever since crypto miners started exiting the country to crypto-friendly regions, and almost no one is seeking cheap power again.
Remarkably, most of the ads for these plants are situated in Sichuan province, a region with the capacity to supply cheap electricity because of its abundant water resources. As previously reported in various media outlets, the Sichuan provincial authorities ordered the shut down all crypto-mining operations at the start of this month.
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