Miners back away as Bitcoin price falls continue

The hashrate driving the Bitcoin blockchain has fallen by nearly 40% since it hit a high-point in August. 

As Bitcoin has struggled to maintain its value during that latter part of this year – and with it currently standing at less than 25% of its value during January – the miner that underpin its ecosystem appear to have begun turning off their machines.

According to numbers charted by Blockchain.com yesterday’s 34 exahashes (10^18) per second was a dip in processing effort that rolled back the clock to July this year – with mining having hit a peak with a spike in late August at around 61 exahashes.

While adjusted 7-day averages, show that there has been a steady downward trend in the amount of computing power being dedicated to mining Bitcoin since late September, with a markedly steeper drop-off during November, the hash rate still remains significantly elevated compared to the start of the year. As the price of Bitcoin peaked in January, exahash rates sat in the low-teens – a number that itself was 10-or-so exahashes per second higher than it had been a year prior.

The last drop-off the 7-day chart above shows coincides with the Bitcoin Cash hard fork, which has seen persistent rumours of Bitcoin hash power being diverted under leasing agreements to prop up the two battling blockchains there. According to research by BitMEX, the leasing and power costs of that diverted computing power has been costing the opposing factions millions per day. That recent development, however, cannot account for the longer-term downtrend.

Earlier in the year, as hashrates peaked, we reported $7,300 to be the estimate breakeven market price for mining Bitcoin. With the price of BTC now down in the low $4,000s its unsurprising to find pools struggling – though mining difficulty has also come down for the first time in 2018 of late.