After falling nearly 40% to 170.60 EH/s, Bitcoin’s network hash rate has recovered, rising to 241.29 EH/s. The hash rate had fallen from a weekly peak of 276.40 EH/s.
The drop was attributed to bone-chilling temperatures across the United States of America that stretched the country’s electricity grid.
Christmas Chill Cripples Mining Operations
The week leading up to Christmas saw a monster storm wreak havoc as the cold arctic chill swept across the United States, crippling the energy grid and leaving millions without power. The freezing temperatures also claimed 28 lives. Bitcoin mining operations were also severely impacted, with the energy grid stretched thin. According to reports, Bitcoin miners in Texas, which account for a significant chunk of the country’s hash rate, voluntarily ceased operations, giving power back to the grid and allowing residents to keep their homes heated.
The disruption caused due to the mining operations had a significant impact on Bitcoin’s hashrate. Typically, the hash rate stays between 225 and 300 Exhashes per second (EH/s). On the 25th of December, this number dropped to 170.60 EH/s. However, the hashrate rose to 241.29 EH/s, according to data sourced by hash rate mining calculator CoinWarz.
Community Debates Cause Of Drop
Bitcoin’s hash rate is calculated by measuring the hashes produced by Bitcoin miners when they are solving the subsequent block. The hash rate is considered a key metric for assessing the Bitcoin network’s security. The drop in hash rate prompted John Stefanop, FutureBit founder, to issue a controversial statement blaming highly centralized mining operations in Texas for switching off at the same time for the drop. Stefanop stated,
“I know, does not change the fact that a few large mines in Texas affect the entire network to the tune of 33%... everyone’s transactions are now being confirmed 30% slower because the hash rate is not decentralized enough. If hash rate was distributed evenly around the world by 10’s of millions of small miners instead of a few dozen massive mines, this event would not have even registered on the network.”
However, Bitcoin bull Dan Held countered the argument, stating that weather patterns and their impact on operations does not equal centralized operations or ownership.
Bitcoin Continues To “Work Perfectly”
Despite the weather and the numerous issues it caused, the Bitcoin network continued to function normally. This was pointed out by the CEO of the Bitcoin mining advocacy group, Satoshi Action Fund, Dennis Porter, in a Twitter post. Porter stated,
“Over 30% of the #Bitcoin hash rate has gone offline due to extreme weather in Texas, and yet the global #Bitcoin network continues to work perfectly. Now imagine if Amazon or Google tried turning off 1/3rd of their data centers.”
Burgeoning Hash Rate
Currently, the United States is the biggest contributor to the Bitcoin hash rate. According to the Cambridge Electricity consumption Index, the United States currently accounts for over 37% of the monthly hash rate share. All of the top states for Bitcoin mining, Georgia, Kentucky, New York, and Texas, experienced significant power outages due to the massive snowstorm.
Texas, in particular, has seen a significant Bitcoin mining boom in recent months thanks to favorable regulations. This has seen some of the biggest mining companies set up operations in the state. These include Argo, Rion blockchain, Bitdeer, Compute North, core Scientific, and Genesis Digital Assets.
However, the recent events have contributed to a growing list of headaches for mining companies. The ongoing bear market has resulted in mining companies accruing debt to the tune of $4 billion. Additionally, several prominent US-based mining companies have recently filed for bankruptcy. However, the recent events don’t seem to have had an impact on Bitcoin’s price so far.
