[2019-09-24] BITCOIN NETWORK HASHRATE IN SPOOKY 40% FLASH CRASH !!!!1

[Carlton Banks]

https://www.zerohedge.com/crypto/bitcoin-network-hash-rate-mysteriously-flash-crashes-40

https://cointelegraph.com/news/bitcoin-network-hash-rate-mysteriously-flash-crashes-by-40

https://coin.dance/blocks/hashrate/linear


Authored by Marie Huillet via CoinTelegraph.com,

Bitcoin’s network hash rate dipped a record 40% yesterday, Sept. 23, in a sudden shock for the network.

Data from Coin.dance - corroborated by other sources - indicates that the network’s hash rate plummeted yesterday from over 98,000,000 TH/S to 57,700,000 TH/s.
Mystery flash crash remains unexplained

The flash drop remains unexplained as of press time and is all the more striking given the Bitcoin network’s record-breaking string of new all-time high hash rates throughout summer.

Just five days ago, Cointelegraph had reported that Bitcoin’s hash rate had passed a record 102 quintillion hashes in a historic milestone.

As previously noted, the hash rate of a cryptocurrency  sometimes referred to as hashing or computing power  is a parameter that gives the measure of the number of calculations that a given network can perform each second.

A higher hash rate means greater competition among miners to validate new blocks; it also increases the number of resources needed for performing a 51% attack, making the network more secure.

By press time, Bitcoin’s hash rate has somewhat recovered back to almost 88,300,000 TH/s  yet remains well below its earlier records.

Throughout summer, cryptocurrency analysts had argued that the network’s record-breaking streak of all-time hash rate highs was a bullish indicator for the top coin’s price performance.

In a tweet posted this August, Bitcoin investor Max Keiser had claimed that:

   “Price follows hashrate and hashrate chart continues its 9 yr bull market.”

Back in November 2017, Bitcoin had seen a sudden hash rate downturn of almost 50%, accompanied by slowed transaction processing times, a price dip, and even miners’ short-lived switch over to the forked network, Bitcoin Cash (BCH).

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[Carlton Banks]

Only one problem guys:


what

fucking

flash-crash?



The hashrate dipped a tiny little bit yesterday, just a little bit. I suppose if you measure the inferred hashrate  (because it can't be measured directly) 1 nano-second before a new block drops, after a really long wait for that new block, you could calculate a 40% drop.

But there's no point in using such an erratic measurement (the average change over 1 unusually long block interval ), unless you're going to make a news story out of it to try to manipulate the market, of course


Cointelegraph, Zerohedge, Coindance, and Marie Whoever, shame on you people

[Theb]

Could it that a big group of miners agreed to each to suddenly stop their operations in unison so that they can create a market scare? Of course it is one of the big possibilities out their since I don't see any good explanation how it would dropped that fast, I don't see any notable calamities that had struck any major countries that are big on crypto mining so that couldn't explain the drop. Other thing I see is that a lot of miners are the first ones to bail out on the industry when they think it was bearish, when they are the ones who have triggered it in the first place. It did took a way a lot of market confidence from a lot of people given the price on what we have now.

[squatter]

Data from Coin.dance - corroborated by other sources

The news story here is that they use bad metrics to estimate hash rate. That data doesn't jive with the last 2016 blocks.

Could it that a big group of miners agreed to each to suddenly stop their operations in unison so that they can create a market scare?

That doesn't sound like rational behavior to me.

[1Referee]

In reality, the hashrate dropped MAX 5% if you calculate based on a longer span of blocks, which is very normal. If we go back to the silly metrics a lot of news outlets use, the hashrate PUMPED 30% after that FLASH CRASH. Why don't they report about that? Clear example of how news outlets want to scare off their clueless readers.

Estimated difficulty increase in ~2 days is +7% lol.... What a flash crash that was....  The only REAL crash was the price today that went down by $1500.

[BitHodler]

Could it that a big group of miners agreed to each to suddenly stop their operations in unison so that they can create a market scare?

Makes little sense with how such a move could easily backfire on them and cause more damage to their operations. Miners want a healthy market to extract the most dollars out of their efforts.

It looks more like that there was a team effort of news outlets to create a market scare by spreading this nonsensical news, which might be financed by deep pocket investors/traders heavily shorting the market.

At the end of the day, the drop in hashrate was negligible. I have seen worse drops in hashrate, and these drops weren't covered as aggressively as the minor drop we see news outlets cover right now.

[CryptoBry]

In reality, the hashrate dropped MAX 5% if you calculate based on a longer span of blocks, which is very normal. If we go back to the silly metrics a lot of news outlets use, the hashrate PUMPED 30% after that FLASH CRASH. Why don't they report about that? Clear example of how news outlets want to scare off their clueless readers.

Estimated difficulty increase in ~2 days is +7% lol.... What a flash crash that was....  The only REAL crash was the price today that went down by $1500.

I agree. Well, we should understand that the media are all after getting the attention of the readers or traffic so emphasizing on the good news is not on their resume plus they know that people are mostly interested with bad news anyway. Now, having said that, I am a little bit moved that Bitcoin is now back at the $8600+ level though I know that a dip is a good opportunity but we know that the market can be reacting to some worrisome concerns. Is the price crash connected to the hashrate decline?

[buwaytress]

Makes me wish I owned 2 or 3 big mining companies, and just for the heck of it, after finding the last block before a difficulty adjustment, switch everything off just to see hearts flutter and tongues wagging. My shareholders would all go after me I guess, even if it were for a bit of time.

Think about it. Very, very few and unlikely scenarios for 40% to just disappear. But hey, if we have to deal with people spitting million-dollar predictions by 2019, we gotta deal with people talking about 40% hashrate loss.

[cr1776]

In reality, the hashrate dropped MAX 5% if you calculate based on a longer span of blocks, which is very normal. If we go back to the silly metrics a lot of news outlets use, the hashrate PUMPED 30% after that FLASH CRASH. Why don't they report about that? Clear example of how news outlets want to scare off their clueless readers.

Estimated difficulty increase in ~2 days is +7% lol.... What a flash crash that was....  The only REAL crash was the price today that went down by $1500.

I agree. Well, we should understand that the media are all after getting the attention of the readers or traffic so emphasizing on the good news is not on their resume plus they know that people are mostly interested with bad news anyway. Now, having said that, I am a little bit moved that Bitcoin is now back at the $8600+ level though I know that a dip is a good opportunity but we know that the market can be reacting to some worrisome concerns. Is the price crash connected to the hashrate decline?

Exactly. If one starts measuring just after one block and ends just before the next, the apparent hash rate would be zero - no blocks were found. If I start measuring just after block A and then end just before block C with B in between the hash rate would be much less than if I start measuring just before block A and just after block C.  If this persisted over 24-72 hours, it might be meaningful, otherwise it is quite likely to be noise in the data.  When you have one block in around 90 minutes and a small enough measurement period, it might appear to have a lower hash rate when in fact it is pure variance in finding a block.

The click bait, FUD type articles are rampant.

[davis196]

Could it that a big group of miners agreed to each to suddenly stop their operations in unison so that they can create a market scare? Of course it is one of the big possibilities out their since I don't see any good explanation how it would dropped that fast, I don't see any notable calamities that had struck any major countries that are big on crypto mining so that couldn't explain the drop. Other thing I see is that a lot of miners are the first ones to bail out on the industry when they think it was bearish, when they are the ones who have triggered it in the first place. It did took a way a lot of market confidence from a lot of people given the price on what we have now.

The possibility of a crypto miner market cartel is always there.Maybe the miners want to create panic or maybe some big miner was struck by some secret attack.
Anyway,there's no room for panic or drama.
Like many other forum members have posted before:"if the hashrate does down,difficulty goes down as well".
There's nothing to worry about.

[Carlton Banks]

check out mempool reaction:

https://jochen-hoenicke.de/queue, set to 4 days.



you'll see that there was a sustained queue of transactions before the price-drop, but unlike typical drops in price, the mempool has been very empty after the drop. This means people aren't sending BTC to exchanges, which implies they aren't phased by this.

It also implies (maaaaybe) that some people knew the scare-story was coming, and sold on September 23rd to prepare to capitalize on the FUD (sell at 10,000, buy back in after the FUD at 8,000). If so, I hope they get wiped out  (exchanges would need to be manipulating volume stats for this to really work, which is plausible as well as precedented)

[Kakmakr]

check out mempool reaction:

https://jochen-hoenicke.de/queue, set to 4 days.



you'll see that there was a sustained queue of transactions before the price-drop, but unlike typical drops in price, the mempool has been very empty after the drop. This means people aren't sending BTC to exchanges, which implies they aren't phased by this.

It also implies (maaaaybe) that some people knew the scare-story was coming, and sold on September 23rd to prepare to capitalize on the FUD (sell at 10,000, buy back in after the FUD at 8,000). If so, I hope they get wiped out  (exchanges would need to be manipulating volume stats for this to really work, which is plausible as well as precedented)

I have to agree with you Carlton, things are just not making sense. I think there are massive manipulation going on in the background, because an event like Bakkt should have pushed up the price and the opposite happened. Yes, the Bakkt trading volume was disappointing and I think a lot of people expected a lot more from this launch, but the disappointment could not have triggered a massive dump like this.

There are no bad news that would have triggered a Bitcoin dump and also a flash crash with the hashing power like this. When it smells fishy, it must be fish. 

[Carlton Banks]

I think there are massive manipulation going on in the background, because an event like Bakkt should have pushed up the price and the opposite happened. Yes, the Bakkt trading volume was disappointing and I think a lot of people expected a lot more from this launch, but the disappointment could not have triggered a massive dump like this.

There are no bad news that would have triggered a Bitcoin dump and also a flash crash with the hashing power like this. When it smells fishy, it must be fish.  

there's a strong implication that this was a manipulated series of events, but we would be unwise to overplay that hand. "Correlation does not equal causation" is an argument either for or against the hypothesis that this is all a market manipulation attempt. We don't have direct evidence that the hashrate fell, but neither do we have direct evidence that the various things that have put downward pressure on BTC exchange rate were not all one big coincidence.

still, I agree that it stinks like orchestrated manipulation would stink.

[Theb]

~snip~

Makes little sense with how such a move could easily backfire on them and cause more damage to their operations. Miners want a healthy market to extract the most dollars out of their efforts.

It looks more like that there was a team effort of news outlets to create a market scare by spreading this nonsensical news, which might be financed by deep pocket investors/traders heavily shorting the market.

At the end of the day, the drop in hashrate was negligible. I have seen worse drops in hashrate, and these drops weren't covered as aggressively as the minor drop we see news outlets cover right now.

Doubt that news outlets can create a FUD so fast that it can make miners bail out by this fast. I'm talking about here is that miners being traders in the crypto industry after all miners are not only mining Bitcoin for a living they also trade their Bitcoin in the market and they can make loads of cash by shorting it. They won't create FUD in the market through news but through the lost in hash rate they made in the market which is very effective seeing on the price we have now. I'm just looking all the possibilities here and miners cashing out big by creating FUD is one of them.

[cr1776]

~snip~

Makes little sense with how such a move could easily backfire on them and cause more damage to their operations. Miners want a healthy market to extract the most dollars out of their efforts.

It looks more like that there was a team effort of news outlets to create a market scare by spreading this nonsensical news, which might be financed by deep pocket investors/traders heavily shorting the market.

At the end of the day, the drop in hashrate was negligible. I have seen worse drops in hashrate, and these drops weren't covered as aggressively as the minor drop we see news outlets cover right now.

Doubt that news outlets can create a FUD so fast that it can make miners bail out by this fast. I'm talking about here is that miners being traders in the crypto industry after all miners are not only mining Bitcoin for a living they also trade their Bitcoin in the market and they can make loads of cash by shorting it. They won't create FUD in the market through news but through the lost in hash rate they made in the market which is very effective seeing on the price we have now. I'm just looking all the possibilities here and miners cashing out big by creating FUD is one of them.

The statement wasn't that it would create a scare to make the miners bail out, but a market scare. 

I don't believe anyone with any understanding of how bitcoin works believes for a second that hash rate dropped by 40%.  As has been discussed up-thread and elsewhere this is likely due to poor logic and calculations on these web sites by not using a long enough rolling window to show the current hash rate.  In ~10 days at the next difficulty adjustment, the truth will be obvious.

[UNOE]

Could it that a big group of miners agreed to each to suddenly stop their operations in unison so that they can create a market scare? Of course it is one of the big possibilities out their since I don't see any good explanation how it would dropped that fast, I don't see any notable calamities that had struck any major countries that are big on crypto mining so that couldn't explain the drop. Other thing I see is that a lot of miners are the first ones to bail out on the industry when they think it was bearish, when they are the ones who have triggered it in the first place. It did took a way a lot of market confidence from a lot of people given the price on what we have now.

It could of been a coordinated attack to just stop mining in oppose to bakkt in not letting the corporate buyers into their cryptocurrency nest. It just might be.
Call it a protest if you will.

[bbc.reporter]

This is a calm and objective article without the fud clickbait and it tries to explain why the hashrate drop occured. I do not know if the writer got it right, however.

In any case, we might never know why unless the miners tell us.



Since the Bitcoin network is decentralized, when you refer to the network, you’re talking about thousands of individual people with computing equipment ranging from hard drives to warehouses full of computers designed specifically for Bitcoin mining. So, to truly know the current Bitcoin hashrate, you’d have to ask each and every one of them how many hashes they are processing. This, obviously, is impractical.

Instead, data providers work backwards and use statistical techniques to arrive at an estimate of the current hashrate. In this case, they look at the speed at which Bitcoin blocks are mined, in combination with the current difficulty level of the network. And taking these together, with a bit of statistical know-how, they come to a reasonable estimate.

But it’s not perfect.

The model assumes that blocks are created every 10 minutes on average. But if blocks happen to be found more quickly or slowly than this—purely by random chance, not by a change of hashrate—this could alter the estimated hashrate. So, if miners continually faced bad luck, and blocks happened to take longer, it would appear as if the hashrate dropped off a cliff.

It’s hard to know if this is exactly what happened—as we’ve said, you’d have to ask all the miners—but it’s the kind of event that could explain yesterday’s drop.

Source https://decrypt.co/9644/why-bitcoin-hashrate-didnt-crash-30-yesterday

[1Referee]

Doubt that news outlets can create a FUD so fast that it can make miners bail out by this fast. I'm talking about here is that miners being traders in the crypto industry after all miners are not only mining Bitcoin for a living they also trade their Bitcoin in the market and they can make loads of cash by shorting it. They won't create FUD in the market through news but through the lost in hash rate they made in the market which is very effective seeing on the price we have now. I'm just looking all the possibilities here and miners cashing out big by creating FUD is one of them.

Miners aren't traders. They at most use futures and options to hedge the risk of seeing the price go down. I haven't seen anyone clearly articulate how miners are actually "manipulating" the market. If they were manipulating the market, it would make more sense that they would be steering the price up instead of down.

If we're looking at the current price action, it couldn't be more bearish with the price hovering under the 200EMA. If it falls below the 200MA that's holding it up right now, the manipulation you're referring to has horribly backfired on them. If we don't make a move back up, we'll get a very ugly monthly close with much lower levels to be visited.

Perhaps it would help you to read the posts above to understand that there was not a loss in hashrate at all. What we experienced was a minor fluctuation due to the variance in block times.