Bitcoin Mining Activity Expected to Increase as Chinese Hardware Manufactures Resume Operations
In late February, the Bitcoin mining difficulty decreased for the first time in 2020 by 0.38%. This could have partly resulted from a government quarantine against the coronavirus in China that led to mining delivery delays.
Despite that drop, the hash rate during that period has posted strong performance, and even hit an all-time high of 136 EH/s. The total network difficulty rate is now expected to bounce back by over 5% on March 10, as hardware delivery slowdown caused by the coronavirus outbreak abates.
In order to drive economic activities, the Chinese government has loosened the nationwide quarantine since mid-February. Businesses have now been urged to resume normal operations and Bitcoin mining operators were not left out. Canaan started partial operations of February 10, while Bitmain resumed activities in mid-February. MicroBT also published a notice on February 25, stating that it had resumed its maintenance services.
This is an indication that miners are gradually receiving their long-awaited new rigs and have started filling the gap by some miners who were preemptively selling off their old machines.
According to Blockware Solution CEO, Matt D’Souza, miners have sold off their Antminer S9s, or upgraded their electrical infrastructure for the next-generation equipment. He claims about 60% to 70% of miners have probably dumped their S9s prior to 2020.
Once these next-generation equipment are deployed, they can ramp up the overall network hash rate, which positively correlates to the difficulty rate. These new machines generally offer double the hash rate of the previous ones.
Although the outbreak caused a few mines to close down, majority of them have remained unaffected. They have continued operations over the past two months, despite the outbreak.
Featured image courtesy of Shutterstock. Source: Cryptopress.