The decline in the price of Bitcoin and other major cryptocurrencies over the past few weeks has caused roughly 600,000 Bitcoin miners to stop mining, according to the founder of F2Pool.
Network hashrate drop indicates a decline in Bitcoin miners
Mao Shixing, the founder of the world’s third largest Bitcoin mining pool F2pool, stated during his interview with Coindesk that the mining pool arrived at this estimation after noticing a drop in the total Bitcoin network hashrate and the average hashpower of older mining devices that are finding it difficult to make profits.
Data obtained from blockchain.info revealed that Bitcoin network hashrate has declined by roughly 13 percent over the past two weeks. On November 10, the hashrate recorded was 47 million tera hashes per second (TH/s), but it dropped to 41 million on November 24.
During the interview, Mao stated that the miners who have closed shop and stopped mining Bitcoin are most likely those using older models such as Bitmain’s Antminer T9+ and Canaan Creative’s AvalonMiner 741. F2Pool’s miner’s revenue index showed that these mining devices have an average hashpower of 10 TH/s, which implies that those using them are losing money at the current price of BTC.
He admitted that F2P00l’s mining hashrate has also dropped, stating that “It’s hard to calculate a precise number of miners connected to us that had unplugged. But we saw over tens of thousands of them [shut down] in the past several days based on conversations we had with larger farms that we are in regular contact with.”
This statement comes just days after Mao posted on his Weibo social media account a picture of a man packing computer gear into boxes, apparently done with Bitcoin mining. Mao captioned his post stating, “shutting down is not an option, now have to sell by the kilos”. He told Coindesk that the mining hardware which is being sold is of the older versions that are no longer useful to anyone.
Multiple factors responsible for the current trend
In his interview, Mao explained that numerous factors are responsible for the drastic decline in the number of miners. He stated that one of the reasons is the decline in prices of cryptocurrencies following the Bitcoin cash hardfork a few days ago. Another reason that might have played a role is the increase in electricity cost in China, which is the biggest mining country in the world. Thirdly, manufacturers of mining hardware in China are racing to upgrade their products, and this has led to the older machines becoming useless to the owners as they are uncompetitive.
All these factors working in tandem at the moment has led to the drastic decline in the number of Bitcoin miners, Mao added.