The hashrate of the Bitcoin network has returned to normal levels, days after cold temperatures in the United States put a strain on the country’s electrical grid, causing a temporary drop in hashrate.
In the days leading up to Christmas, freezing temperatures hit the United States, leaving millions of people without power. and claiming at least 28 lives.
According to reports, Bitcoin miners in Texas, which account for a significant portion of the country’s hashrate, voluntarily scaled back operations to return power to the grid so residents can keep their homes warm.
Outages appear to have taken a toll on bitcoin’s hashratewhich is typically around 225-300 exahashes per second (EH/s). On December 25 it fell to 170.60 EH/s.
However, as of December 26, the hashrate has returned to 241.29 EH/saccording to data from the CoinWarz hashrate calculator.
The bitcoin hashrate is calculated by measuring the number of hashes produced by bitcoin miners trying to solve the next block. It is considered a key measure to assess the degree of security of the Bitcoin network.
Recent events sparked controversy declaration from the founder of FutureBit, John Stefanop, who suggested that the hashrate drop was due to several “highly centralized mines” in Texas shutting down at the same time.
“I know, but that doesn’t change the fact that a few big mines in Texas affect the entire network by 33%… transactions from all over the world are now confirmed 30% slower because the hashrate is not decentralized enough,” he said..
“If the hashrate was evenly distributed around the world by tens of millions of small miners instead of a few dozen massive mines, this event would not even have registered on the network,” Stefanop added..
The bitcoin bull Dan Held, however, refuted Stefanop’s view of the events, arguing that weather patterns do not mean centralized ownership or control.
According to the Cambridge Bitcoin Electricity Consumption Index, The United States accounts for 37.84% of the average monthly hashrate share. The top four states in the country for bitcoin mining are New York, Kentucky, Georgia, and Texas, all of which have experienced power outages due to the winter storm..
However, Dennis Porter, the CEO of bitcoin mining advocacy group Satoshi Action Fund told his 127,400 Twitter followers on Dec. 25 that, While inclement weather, particularly in Texas, caused 30% of Bitcoin’s hashrate in the US to go offline, the network “still works perfectly”.
More than 30% of the #Bitcoin hashrate has gone offline due to extreme weather in Texas and yet the global #Bitcoin network continues to work perfectly.
Now imagine if Amazon or Google tried turning off 1/3rd of their data centers. pic.twitter.com/G49iqBZXDL
—Dennis Porter (@Dennis_Porter_) December 25, 2022
More than 30% of the bitcoin hashrate has been taken offline due to extreme weather in Texas, and yet the global Bitcoin network continues to function perfectly. Now imagine if Amazon or Google tried to shut down 1/3 of their data centers. pic.twitter.com/G49iqBZXDL
Cheap energy and favorable mining regulation in Texas have led to a Bitcoin mining boom in Texas in recent months.which is now home to some of the largest mining companies in the world.
They include Riot Blockchain, Argo, Bitdeer, Argo, Compute North, Genesis Digital Assets, and Core Scientific – which recently received a $37.4 million bankruptcy loan to stay afloat.
However, recent weather events have only added to the list of headaches for bitcoin mining companies.
The bear market has affected bitcoin mining companies with a debt of USD 4,000 millionaccording to recent data.
Many major US-based mining companies have also filed for bankruptcy in recent months.while many other companies are approaching near-insurmountable debt-to-equity ratios that require immediate restructuring.
The tragic weather events have not affected the bitcoin (BTC) price so far, which is currently trading at $16,826only 0.27 less in the last 24 hours.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.