Technical analysts predict that bitcoin hashrates can steadily grow if miners relocate to a new location.
Bitcoin’s hashrate is the measuring unit of processing power used to secure transactions on the blockchain. The hashrate has fallen to its lowest since November 2020, this might be due to a reflection of China’s recent crackdown on cryptocurrency mining and concerns over the network’s energy usage.
The hashrate on a seven-day average slid to 129.1 million exahashes per second on Tuesday, quite significantly different from an all-time high of 180.6 million exahashes per second in mid-May, according to data from Glassnode. Although 105.6 million exahashes was recorded a year ago.
The higher hashrates obtained means more resources devoted to processing transactions on the blockchain and greater resilience to attacks.
China’s Xinjiang Uygur Autonomous Region, the Inner Mongolia Autonomous Region and Qinghai province last week announced that it has plans to shut down some or all bitcoin mines. Yunnan province said it would checkmate on all illegal operations, and officials in Sichuan province, another crypto mining hub, are in discussing to determine regulations.
One of the world’s 15 largest mining pools, China-based 1THash, lost approximately 70% of its hashrate last week, according to Compass Mining Memo, citing data from MiningPoolStats.
Some analysts however predict that the decline in the Bitcoin hashrate will be reversed eventually as some miners relocate from China to other locations.
“Taking a closer look, the latest decrease in hashrate is consistent with previous drops,” wrote Zack Voell, who is a content director at Compass Mining. “After machines shuffle around the map and hash power changes location to new regions, the steady growth and rise of Bitcoin’s hashrate should resume.”