Since November, Bitcoin has been witnessing a drop in price after it hit an all-time high of over $60,000. In addition, the currency is facing a drop since last two weeks where it has lost more than 19% in value. Moreover, the hashrate of Bitcoin has dropped from over 200 exahash per second (EH/s) to 174 EH/s, losing roughly 15 percent in a period of ten days.
For those unaware, Hashrate is the measure of computational power that is used to verify transactions and add blocks in a Proof-of-work (PoW) blockchain. It represents the number of individuals participating in the process of mining bitcoin. In short, more people mining bitcoin will result in a higher hashrate.
Reason behind the Bitcoin hashrate decline
The decline in hashrate is because of the civil unrest in Kazakhstan, which according to Cambridge Centre for Alternative Finance (CCAF) accounts for 18% of the global hashrate. The stats show that after China clamped down on Bitcoin mining, Kazakhstan became the second-largest Bitcoin mining country after the USA. However, the country’s internet was impacted and faced shut down because of the unrest.
A month’s chart for Bitcoin’s hashrate indicates that the network hashpower lost roughly 15% in ten days. However, reports from Kazakhstan show that the unrest has now stabilised. Furthermore, data Center Industry and Blockchain Association of Kazakhstan (NABCD) conveyed that the issues did not affect digital currency miners.
Until China banned mining activity in the country, it was the biggest center for mining in the world. However, because of the ban, there was over 50 percent drop in hashrates in July 2021, resulting in 85 exa hash per second (EH/s) on a seven-day average. Following recovery, the hashrates saw a record high of 182 EH/s as mining operations shifted to North America (Canada and America) and Kazakhstan.