The ETH hashrate drops 25% after the mining clampdown in China which means that the bitcoin network was not the only victim of it as we can see in our latest Ethereum news today.
The ETH hashrate drops 25% since its peak in mid-May and this is the direct result of china’s crackdown on crypto mining which resulted in the exodus of mining operations. According to BitInfoCharts, the ETH network hashrate hit an ATH of 585.5 TH/s on May 20. In the weeks following, it crashed to a three-month low. The 26% decline over six weeks was one of the sharpest falls in ETH history. Just 40 days after the hashrate hit the peak, it crashed 17% in just 10 days. This is the worst drop in a 10-day span in the ETH history as per the data from Glassnode.
During the 2018 winter, the ETH hashrate fell 57% but they did so over a few months as well. The hashrate which is a measure of network computing power is loosely correlated with the ETH price. As the asset gains more value, mining will become profitable and will attract mining resources to the network and boost the hashrate. William Foxley who is an editorial director at BTC mining company Compass Mining thinks that GPU-based ETH mining is harder to suppress than large-scale ASIC mining for BTC so speaking to the Defiant, he said that GPUs can be placed in small locations less likely to be found by the government.
China-based Sparkpool as the ETH second-largest mining pool experienced a 305 dro pin the hashrate since the mandate was issued:
“Where things get interesting is for China-based Ethereum miners, who not only had to bear EIP 1559’s reduced fees, but now also a geographic transition out of larger industrial setups.”
The transition to ETH 2.0 and proof of stake will phase out all ETH mining operations but there could be a few difficult months ahead for ETH miners. In the related developments, the SCMP reported that all smaller hydropower stations are for sale on e-commerce sites in China. As the demand for cheap power dries up and the miners migrate to friendlier climes, the price of power generation installations dropped. Most of the plants are in the southwestern Sichuan province with an abundance of water that provides cheap electricity.