Over the past month, major blackouts have occurred in northern China, where, in fact, a large percentage of Bitcoin miners are located. This has led to a drop in the hashrate and, with it, an increase in Bitcoin transaction fees.
Fewer miners, higher transaction costs in Bitcoin
The hashrate of several major Bitcoin mining pools have dropped significantly. In fact, according to Wu Blockchain, at the end of last week mining groups such as Antpool, Binance Pool, BTC.com and Poolin experienced a decrease of 24.5%, 20%, 18.9% and 33%, respectively.
As a consequence, as of yesterday, Wu Blokchain reported a decrease of the Bitcoin hashrate by 20% in the wake of the blackouts.
Basically the decrease in hashrate causes a significant delay in transaction processing and of course an increase in fees in Bitcoin.
‘Bitcoin miners’ fees have increased significantly. Fees paid to Bitcoin miners in a single day amount to $ 16.76303 million. The main reason is that the power outage and inspection in Northwest China have lowered the hash rate by 20%, leading to a backlog of transactions ”, Wu Blockchain explained.
Therefore, as a result of the blackouts, there are fewer mining equipment to process transactions; which generates delays considering that the number of transactions that the network can process within a certain period of time is limited.
Does it explain the recent price drop?
Many crypto experts have attributed Bitcoin’s price correction to the Hashrate crash. Obviously this generated controversy in the crypto market.
Especially since some have claimed in networks that the decrease of the Bitcoin hashrate was 40%; while others affirm that it was not more than 20%. Also, there is a discrepancy as to when the crash occurred.
However, and despite the recent correction, Rekt Capital opined that this correction has not affected the uptrend of Bitcoin at all.