After recording an all-time high of 218 exahash per second last April 15, the Bitcoin (BTC) network hashrate has dropped nearly 50%, and the electrical grid blackouts in Xinjiang, China, are being blamed for this.

The result was that Bitcoin mining pools began plummeting. Antpool fell by 25%, while BTC.com was down by 19%. Binance pool dropped 20%, while Poolin recorded the highest dip at 33%.

Dovey Wan of Primitive Crypto also shared some information, saying that Bitcoin’s hashrate dropped by 30% instantly after the power outage in the region. Recovery is expected to take a week, and all data centers were shut.

Unfortunate event — a good source of data?

Despite the unforeseen and unfortunate events that greatly affected Bitcoin mining, some entities see a silver lining.

Nic Carter, co-founder of blockchain data aggregator Coinmetrics.io said that Xinjiang grid going down and its effects on bitcoin mining are what economists call a natural experiment. It is a very useful source of data.

Xinjiang is not exclusively coal-based, although it heavily depends on the said fuel. As of 2019, there was 35% renewable energy, mainly wind and solar. It’s the third-highest renewable energy share of all Chinese provinces behind Gansu and Ningxia.

Carter claimed that next week, the drop could tell just how much hashrate the region accounts for.

Bitcoin price and hashrate correlation

The Block Crypto director of research Larry Cermak was quick to clarify to a great number of people that the price drop experienced by Bitcoin is correlated with the hashrate plunge.

He said in response to a Willy Woo tweet that corrections are natural after run-ups and weekends with low liquidity are perfect. Markets were bid up for Coinbase, and even that ended up being disappointing, as well. The researcher said it was not surprising.

He said that the drop in the price of the largest cryptocurrency should not be blamed for the loss of hashpower, just like what is being experienced now.

Image courtesy of Karolina Grabowska/Pexels

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Source: https://bitcoinerx.com/blockchain/bitcoin-btc-hashrate-down-by-half-after-hitting-all-time-high/