Miners Lose Revenue: The Biggest Hashrate Collapse And Emerging Issues
Miners have already felt the negative effects of the bearish decline in Bitcoin over the past few weeks. Now the headache for miners is a decrease in the performance and security of the Bitcoin network, which is determined by the hash rate. Earlier on, analysts predicted alarming trends for the Bitcoin network and now they have fully materialized.
A hashrate is an indicator that determines the processing power of the equipment used for mining. It captures the number of hashes per second. If the hash rate is high, this means that the performance of creating new blocks is also high. A record hashrate in 2020 was recorded on March 5 and amounted to ATH 133 TH/s. At that time, this meant that the cryptocurrency market had high viability.
The other day, the situation has radically changed for the worse. According to BitInfoCharts, on March 16, the Bitcoin hash rate dropped to 99.78 TH/s.
Why did it happen? Most likely, the decrease in the hash rate was caused by the complication of market conditions due to the negative consequences of the spread of Coronavirus. Mining is losing profitability. Due to the depreciation of Bitcoin, miners were in a difficult situation. They receive a low income, which does not fully cover the costs.
F2Pool experts noted that now the profitability of mining is lower than when Bitcoin was trading for 3 thousand dollars at the end of 2018. Then the hash rate was more than 100 thousand tons/s. We have already seen that a drop in the price of Bitcoin can trigger a decrease in mining profitability and the sale of cryptocurrency.
At that time, miners did not get the desired profit, so many of them left the “cryptocurrency game”. Under such conditions, hashrate continued to decline. Cryptocurrency exchanges recorded a drop in the Bitcoin network. In particular, according to Huobi, the record hash rate drop was 26%. After Btc.com data, then the Bitcoin hash rate fell by 10%.