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Bitcoin Hash Rate Seemingly Unaffected by Flooded Chinese Mining Farms

2 mins
Updated by Kyle Baird
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According to a tweet from Poolin, a multi-currency mining pool, recent rains in Sichuan, China have devastated local mining farms. While the authenticity of these claims is yet to be verified by local media, the tweet included two videos as proof.
One video shows heavy flooding and landslides, while the other follows a man pulling out mining hardware from the mud. However, the event left no visible impact on Bitcoin’s hash rate. The region is known to be a hub for cryptocurrency mining because of inexpensive electricity generated from renewables.

No Impact on Bitcoin Hash Rate

The Chinese province of Sichuan was struck by torrential rain in early July. The rainfall affected thousands of people and caused substantial economic loss to the region. According to the State Flood Control and Drought Relief Headquarters, the rain hit Anhui, Jiangsu, Sichuan, Shandong, and Jilin provinces. The National Metrological Center reported that more heavy rainfall is expected to hit areas from Hubei, Sichuan, and Jiangsu provinces. Red Li, a co-founder of a Chinese cryptocurrency media outlet, said that some mining facilities were wiped out entirely due to the flood. He added though that there hasn’t been a significant drop in the Bitcoin hash rate, which recently hit an all-time high, for the pools that are located in that region. However, since the measurement of the hash rate is lagging, there could be a drop seen in the coming days. By looking at hash rate data, we can observe a drop from its all-high of 82,5 EH/S on August 18 to 68,8 EH/S on August 20. However, it cannot be confirmed whether the drop in hash rate was caused due to these floods or by arbitrary fluctuation. Molly Zhang, an admin of Poolin’s official Telegram channel, clarified that they did not record the videos of the devastation posted on Twitter. However, she did say that some users were using the area’s hosting services. StormGain

2018 Floods Caused Bitcoin Hash Rate to Drop

Last year, another bout of floods caused massive devastation to the hydropower and telecommunication infrastructure of the province. The damage also affected mining facilities as tens of thousands of them went offline, causing a massive drop in Bitcoin’s hash rate from 43EH/s to 30EH/s. However, the hash rate rebounded in approximately 24 hours. Eric Meltzer, a partner at INBlockchain who discussed the Sichuan Bitcoin mining facility case with local analysts, said that the hash rate drop was a combined effect of the flood in Sichuan and the heatwave in Eastern Europe. The Sichuan province has long been an ideal location for cryptocurrency mining operations due to the low cost of electricity. The region gets its electricity from hydroelectric power plants. Many of the region’s rivers and waterways supply the power plants with water. Although it is a lucrative location for mining operations, the flip side of it includes danger from heavy rainfall and floods. According to a report by Cambridge Centre for Alternative Finance, over half of all Bitcoin mining pools globally are based in China. Do you think the floods will result in a noticeable drop in hashrate? Let us know your thoughts in the comments below. Buy and trade cryptocurrencies with a 100x multiplier on our partner exchange, StormGain.
Images are courtesy of Twitter, Shutterstock.
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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
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