It had been several months since China talked about putting a squeeze on cryptocurrency mining. In June, it all became official, with entire mining farms being dismantled and relocated. The Hashrate of Bitcoin has gone down 46% from the peak of May 2021. It has gone down to 91,2 EH/s from the maximum of 171,4 EH/s, with consequences on the block validation time.
On 27/06 it took an average of 1398 seconds to mine a block, the most since another peak in 2017.
This is an overview of the average validation time per block over the years:
The Sichuan region that was evaluated to host about 50% of the global hashrate of Bitcoin mining (due primarly to low cost of energy during the rain season using hydroelectric energy) has seen quite all mining companies halting activities from the 24:00 of 19th June 2021.
What are the consequences of such brutal and sudden reduction of hashrate? In theory, less competition in mining means less security to prevent the 51% attack, although it is still highly unlikely to happen for many other reasons.
Another consequence is that the difficulty adjusting, which takes place roughly every two weeks, will be the biggest in all Bitcoin history, and it is expected go down about -20%. During this time we shall see longer time to mining blocks, for i.e.
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