Massive drop in Hashrate (50%) ~100 ExH/S

[btc-room101]

So there are people wanting the gear

There is always someone who wants some gears, most of the time it's the noobs who can't do the math and think mining bitcoin will make them rich overnight, looking at the big picture, Bitcoin mining gears prices took a huge dive in China, today, S19 pro was sold for $7980, all the way down from 15k a few weeks ago, difficulty needs to go 12.5T or price to 60k for those who bought S19s at 15k to actually ROI within a year or so, and honestly I don't see either happening anytime soon.

With that being said, if someone is fully positioned in fiat and wants to start mining, the current prices are far less risky, it might be a good idea to start accumulating gears now, especially that it seems like the sideways boring market is going to last for a few months, it's the best time for mining as it easily beats the buy-n-hodl model.

best comment here, but where do u buy the hw? I'm here in asia, and I don't see any, everything is 'out of stock', hdd's, gpu's, .. power-supplys all is GONE

I agree with u timing is all, last summer I was buying new RTx-3070's for $300, now sold on amazon for $2k usd

Where are these good deals on bitmain miners? Certainly 'weak hands' should be folding in this current carnage, but where are the deals?

[mikeywith]

best comment here, but where do u buy the hw? I'm here in asia, and I don't see any, everything is 'out of stock', hdd's, gpu's, .. power-supplys all is GONE

Maybe because you are searching in the wrong place, prices fell in China just a while ago, for that to reflect on other regions it will take some time, but it will most certainly happen, if you want to take advantage of the current prices in China you need to contact Chinese sellers, most of these websites are not based in China, and most Chinese sellers do their sales on telegram and Alibaba/Aliexpress.

There are a few Chinese sellers in this forum, you can find their sale posts in the hardware market place

[rulovico]

not a china ban
but a upgrade of miners and keeping hashrate down to avoid a difficulty jump

Your comment aged like milk

[rulovico]

You either don't know what 50% means or you don't know that the total bitcoin hashrate for the past 3 months has been about 130 EHS. You also seem to be incapable of looking at the hashrate stats which shows that hashrate for the most part has been pretty much the same with normal ups and downs for the past 9 months. Even if you bothered looking at the recent hashrate in June you can see that it has gone up from about 118 EHS to 140 EHS.
On top of all that China doesn't even have 50% of the hashrate in total all around their vast country. Even if they banned bitcoin mining country wide (which they won't) the hashrate won't drop nearly that much.

Well i know what  50% means and  I know the total  bitcoin hashrate trends, and i know know that you’d be out of your depth in a mud puddle

[mikeywith]

On top of all that China doesn't even have 50% of the hashrate in total all around their vast country.

Not sure what's your source for this information but it's actually wrong, the fact is, China does have more than 50% of the total hashrate, in 2020 china had over 70% of the hashrate, it has probably declined since then and I have not looked into it for a while but I am pretty positive that even at this stage with all the "mining ban" going on China is still "very easily" controls more than 50% of the hashrate.

[Quickseller]

You either don't know what 50% means or you don't know that the total bitcoin hashrate for the past 3 months has been about 130 EHS. You also seem to be incapable of looking at the hashrate stats which shows that hashrate for the most part has been pretty much the same with normal ups and downs for the past 9 months. Even if you bothered looking at the recent hashrate in June you can see that it has gone up from about 118 EHS to 140 EHS.

According to bitinfocharts, the hashrate topped out at 171 EHs on May 14, and bottomed out at 83 EHs on June 23, a drop of about 51.4%. Also according to bitinfocharts, the current hash rate is about 87 EHs. Obviously all these figures are estimates, and there is the potential that variance influenced all or some of these figures, but it is undeniable that a very significant portion of the network hashrate has been recently taken offline.

From the looks of it, there is a good chance we will see difficult decline by the maximum 25% the next change period, although it may not be quite that much. Some of the decline may be attributed to the price declining, but I think the overwhelming majority of the decline is due to the CCP seizing mining equipment throughout China.

Given how much production of ASICs is done in China, along with the above, I think there is a non-zero chance that a single entity (the Chinese government) that is hostile to Bitcoin has or will have mining capacity that is greater than 51% of the total hashrate. It is possible that the CCP has not seized all of the mining equipment that has been taken offline, and that some of the reduction is due to mining operators turning off their machines and attempting to move them out of the country so they can continue using them.

On top of all that China doesn't even have 50% of the hashrate in total all around their vast country.

Not sure what's your source for this information but it's actually wrong, the fact is, China does have more than 50% of the total hashrate, in 2020 china had over 70% of the hashrate,

I believe you are referring to pools based in China, which is not the same as miners based in China. A miner with equipment in the US who is mining on a pool based in China will move to a different pool if the pool shuts down, while a miner based in China will stop mining if the Chinese government shuts down its operations. With that being said, I do think that more than 50% of the total Bitcoin mining capacity is based in China, or if not, an amount very close to 50%.

[mikeywith]

I believe you are referring to pools based in China, which is not the same as miners based in China.

Nop, I am referring to the actual mining gears running in china, nothing to do with the pools, although some of the studies conducted on this matter such as the one by Cambridge uses pool data, but not the origin of the pool, they rather request actual traffic based on IP-address by region from the largest pools and that study shows a lot more than 50% of the hashrate comes from gears located in China.

[philipma1957]

You either don't know what 50% means or you don't know that the total bitcoin hashrate for the past 3 months has been about 130 EHS. You also seem to be incapable of looking at the hashrate stats which shows that hashrate for the most part has been pretty much the same with normal ups and downs for the past 9 months. Even if you bothered looking at the recent hashrate in June you can see that it has gone up from about 118 EHS to 140 EHS.

According to bitinfocharts, the hashrate topped out at 171 EHs on May 14, and bottomed out at 83 EHs on June 23, a drop of about 51.4%. Also according to bitinfocharts, the current hash rate is about 87 EHs. Obviously all these figures are estimates, and there is the potential that variance influenced all or some of these figures, but it is undeniable that a very significant portion of the network hashrate has been recently taken offline.

From the looks of it, there is a good chance we will see difficult decline by the maximum 25% the next change period, although it may not be quite that much. Some of the decline may be attributed to the price declining, but I think the overwhelming majority of the decline is due to the CCP seizing mining equipment throughout China.

Given how much production of ASICs is done in China, along with the above, I think there is a non-zero chance that a single entity (the Chinese government) that is hostile to Bitcoin has or will have mining capacity that is greater than 51% of the total hashrate. It is possible that the CCP has not seized all of the mining equipment that has been taken offline, and that some of the reduction is due to mining operators turning off their machines and attempting to move them out of the country so they can continue using them.

On top of all that China doesn't even have 50% of the hashrate in total all around their vast country.

Not sure what's your source for this information but it's actually wrong, the fact is, China does have more than 50% of the total hashrate, in 2020 china had over 70% of the hashrate,

I believe you are referring to pools based in China, which is not the same as miners based in China. A miner with equipment in the US who is mining on a pool based in China will move to a different pool if the pool shuts down, while a miner based in China will stop mining if the Chinese government shuts down its operations. With that being said, I do think that more than 50% of the total Bitcoin mining capacity is based in China, or if not, an amount very close to 50%.

Well I look at it this way.  the diff was 25.3 and on Thursday or Friday the diff will be 15.9

that  is about 40% drop. not 50% and is likely to be a bit more accurate then any 1 day hashrate estimate since it is over 14 days not 1.

The real keys to all of this are:

How much gear is seized.
How much seized gear is destroyed.
How much seized gear comes back on line.

It is possible that the diff will drop to 15.9 from the current 19.9 and is possible it will drop again to 13-14 or so

Lets say July 1 we are at 15.9 and July 16 we are at 13.5

Lets say price is 34k

for a miner still in business they did not lose anything. since.

13.25/25.3 =52.37% diff

34/65 =  52.31% price

So China simply did me in the USA and anyone else mining in the USA a favor.

At peak diff in may I earned 52%% the btc I will earn on July 1

or worst case

we only drop to a diff of 15.9

that is 15.9/25.3 = 62.84. so I Earned 62.84% of the btc in May that I earn now,

If btc lasts for decades it be going up not down. So this is good for a USA or Russian or South America farm Even Europe.

[Quickseller]

You either don't know what 50% means or you don't know that the total bitcoin hashrate for the past 3 months has been about 130 EHS. You also seem to be incapable of looking at the hashrate stats which shows that hashrate for the most part has been pretty much the same with normal ups and downs for the past 9 months. Even if you bothered looking at the recent hashrate in June you can see that it has gone up from about 118 EHS to 140 EHS.

According to bitinfocharts, the hashrate topped out at 171 EHs on May 14, and bottomed out at 83 EHs on June 23, a drop of about 51.4%. Also according to bitinfocharts, the current hash rate is about 87 EHs. Obviously all these figures are estimates, and there is the potential that variance influenced all or some of these figures, but it is undeniable that a very significant portion of the network hashrate has been recently taken offline.

From the looks of it, there is a good chance we will see difficult decline by the maximum 25% the next change period, although it may not be quite that much. Some of the decline may be attributed to the price declining, but I think the overwhelming majority of the decline is due to the CCP seizing mining equipment throughout China.

Given how much production of ASICs is done in China, along with the above, I think there is a non-zero chance that a single entity (the Chinese government) that is hostile to Bitcoin has or will have mining capacity that is greater than 51% of the total hashrate. It is possible that the CCP has not seized all of the mining equipment that has been taken offline, and that some of the reduction is due to mining operators turning off their machines and attempting to move them out of the country so they can continue using them.

On top of all that China doesn't even have 50% of the hashrate in total all around their vast country.

Not sure what's your source for this information but it's actually wrong, the fact is, China does have more than 50% of the total hashrate, in 2020 china had over 70% of the hashrate,

I believe you are referring to pools based in China, which is not the same as miners based in China. A miner with equipment in the US who is mining on a pool based in China will move to a different pool if the pool shuts down, while a miner based in China will stop mining if the Chinese government shuts down its operations. With that being said, I do think that more than 50% of the total Bitcoin mining capacity is based in China, or if not, an amount very close to 50%.

Well I look at it this way.  the diff was 25.3 and on Thursday or Friday the diff will be 15.9

that  is about 40% drop. not 50% and is likely to be a bit more accurate then any 1 day hashrate estimate since it is over 14 days not 1.

Yes, assuming a 25% drop later this week, the difficulty will have dropped a total of about 40% from its peak. I think a 14 day measurement is too long because equipment is consistently being brought online and potentially taken offline. So as of when difficulty peaked, there could have been enough equipment online for the difficulty to increase at the end of the next difficulty period if the equipment that was online remained constant. Also, the projected difficulty decrease at the end of the current difficulty period has gone down over time, and this tells me that additional equipment has been taken offline over time, so again, once the difficulty decreases, assuming the same amount of equipment remains online, the difficulty would drop at the end of the next difficulty period.

So China simply did me in the USA and anyone else mining in the USA a favor.

If the Chinese government has control of 50% of the mining equipment that exists, it can potentially execute a 51% attack against bitcoin. Much of the production of ASICs is done in China, so the Chinese government could seize outgoing shipments of miners as they are being shipped overseas, and the Chinese government could force mining manufacturers to produce additional ASICs for the Chinese government. There is also a chip shortage worldwide, so manufacturers outside of China are going to have problems with production.

If the Chinese government does not do anything with the equipment taken offline, you would be correct that seizing equipment is good for US based miners. Bitcoin is censorship resistant, and gives people freedom to transact without government permission. These are two things the Chinese government does not like, and bitcoin makes it more difficult for the Chinese government to control its people, which is one of its goals.  

I believe you are referring to pools based in China, which is not the same as miners based in China.

Nop, I am referring to the actual mining gears running in china, nothing to do with the pools, although some of the studies conducted on this matter such as the one by Cambridge uses pool data, but not the origin of the pool, they rather request actual traffic based on IP-address by region from the largest pools and that study shows a lot more than 50% of the hashrate comes from gears located in China.

Do you have a link to some of these studies? I would be interested to read them. Thanks in advance.

[kano]

...
If the Chinese government has control of 50% of the mining equipment that exists, it can potentially execute a 51% attack against bitcoin. Much of the production of ASICs is done in China, so the Chinese government could seize outgoing shipments of miners as they are being shipped overseas, and the Chinese government could force mining manufacturers to produce additional ASICs for the Chinese government. There is also a chip shortage worldwide, so manufacturers outside of China are going to have problems with production.
...

Well one must remember that the only 51% attack they can do that anyone would care about would be to control a % of what transactions are confirmed.
So while that is indeed an issue, it's not a case of what many seem to think that a large mining cartel could change the rules of Bitcoin - coz they can't - doing that just produces an altcoin and a matching drop in the Bitcoin hash rate.

However, since the ASIC chips used in miners are made in Taiwan, not China, I suspect that China invading Taiwan to make this happen would have much more far reaching effects than just Bitcoin

[mikeywith]

so the Chinese government could seize outgoing shipments of miners as they are being shipped overseas, and the Chinese government could force mining manufacturers to produce additional ASICs for the Chinese government.

Just so you know there is no "seize" in this, not sure what the news is saying but the truth of the matter is I have helped a few clients order a few hundred miners from China in the past few days and some of the gears have already passed China borders with no issue, the Chinese government told the miners in some regions to stop mining, so mining is "illegal" but owning/selling/buying Asic gears is NOT, so if the government is going to seize anything (which I doubt) it will be a small percentage of gamblers who still mine in "secret", but that is just a small number of miners which doesn't make a huge difference.

Do you have a link to some of these studies? I would be interested to read them. Thanks in advance.

Here is one > https://cbeci.org/mining_map

There is honestly a ton of evidence that suggests China "had" more than 50% of the hashrate, it's all over the place you don't even need to research it, after this mess is over, the numbers will change but we don't know to what extent, it will take some time for the data to be accurate again.


On a side but related note, we are about to have one of the largest difficulty drops in Bitcoin's history.

[philipma1957]

so the Chinese government could seize outgoing shipments of miners as they are being shipped overseas, and the Chinese government could force mining manufacturers to produce additional ASICs for the Chinese government.

Just so you know there is no "seize" in this, not sure what the news is saying but the truth of the matter is I have helped a few clients order a few hundred miners from China in the past few days and some of the gears have already passed China borders with no issue, the Chinese government told the miners in some regions to stop mining, so mining is "illegal" but owning/selling/buying Asic gears is NOT, so if the government is going to seize anything (which I doubt) it will be a small percentage of gamblers who still mine in "secret", but that is just a small number of miners which doesn't make a huge difference.

Do you have a link to some of these studies? I would be interested to read them. Thanks in advance.

Here is one > https://cbeci.org/mining_map

There is honestly a ton of evidence that suggests China "had" more than 50% of the hashrate, it's all over the place you don't even need to research it, after this mess is over, the numbers will change but we don't know to what extent, it will take some time for the data to be accurate again.


On a side but related note, we are about to have one of the largest difficulty drops in Bitcoin's history.

Well that is the question how much comes back on line.
I have seen offers for huge moq worth of used mining gear.
So obviously all has not been seized or destroyed.

I can go on telegram and find 5 major sellers selling 1eh worth of used gear.

But 70eh went off line.

So how much comes back?

Personally I think we get another drop after this one.

this one will drop from 19.9 to 15.0
next drop I think and or guess will drop us to 13.5

[Quickseller]

so the Chinese government could seize outgoing shipments of miners as they are being shipped overseas, and the Chinese government could force mining manufacturers to produce additional ASICs for the Chinese government.

Just so you know there is no "seize" in this, not sure what the news is saying but the truth of the matter is I have helped a few clients order a few hundred miners from China in the past few days and some of the gears have already passed China borders with no issue, the Chinese government told the miners in some regions to stop mining, so mining is "illegal" but owning/selling/buying Asic gears is NOT, so if the government is going to seize anything (which I doubt) it will be a small percentage of gamblers who still mine in "secret", but that is just a small number of miners which doesn't make a huge difference.

It is good to know that ASICs are moving out of China without issue. Obviously I was speculating when I suggested that miners might get seized by the Chinese government. I would point out that there are no property rights or due process in China when dealing with the government. It also should not be a secret that the Chinese government is hostile to Bitcoin, in part because it makes it more difficult for them to control their people.

Do you have a link to some of these studies? I would be interested to read them. Thanks in advance.

Here is one > https://cbeci.org/mining_map

There is honestly a ton of evidence that suggests China "had" more than 50% of the hashrate, it's all over the place you don't even need to research it, after this mess is over, the numbers will change but we don't know to what extent, it will take some time for the data to be accurate again.

Interesting read. As they noted, they assumed that the distribution of miners is representative of the three pools they surveyed, and this may or may not be true.

On a side but related note, we are about to have one of the largest difficulty drops in Bitcoin's history.

The difficulty dropped by 18% in 2011, and since then, it has never dropped as much. From the looks of it, the difficulty will drop by more than 18%, making it the biggest difficulty drop in history, and there is a decent chance it will drop by the maximum 25%.

...
If the Chinese government has control of 50% of the mining equipment that exists, it can potentially execute a 51% attack against bitcoin. Much of the production of ASICs is done in China, so the Chinese government could seize outgoing shipments of miners as they are being shipped overseas, and the Chinese government could force mining manufacturers to produce additional ASICs for the Chinese government. There is also a chip shortage worldwide, so manufacturers outside of China are going to have problems with production.
...

Well one must remember that the only 51% attack they can do that anyone would care about would be to control a % of what transactions are confirmed.
So while that is indeed an issue, it's not a case of what many seem to think that a large mining cartel could change the rules of Bitcoin - coz they can't - doing that just produces an altcoin and a matching drop in the Bitcoin hash rate.

A 51% attack could result in major bitcoin related businesses suffering losses after falling victim to double spends. It could also result in all other miners getting any of their found blocks being orphaned.

However, since the ASIC chips used in miners are made in Taiwan, not China, I suspect that China invading Taiwan to make this happen would have much more far reaching effects than just Bitcoin

The chips are made in Taiwan, but I believe the miners themselves are manufactured in mainland China.

[mikeywith]

Interesting read. As they noted, they assumed that the distribution of miners is representative of the three pools they surveyed, and this may or may not be true.

Those 3 pools represent close to 40% of the total hashrate which is a fact judging by the number of blocks they find, so I agree, it still is a matter of accuracy, but the fact is, the numbers in China are more likely to be more than shown in the study, simply because there are many large farms in China that mine solo, while most other non-chinese miners are mid-range operations who mine to pools, so if the study shows 70% at any given time, it's probably 80% or so.

and there is a decent chance it will drop by the maximum 25%.

Are you sure the maximum is 25%? I thought the new difficulty can't fall below 25% of the previous, since the current diff is 19.9T, the lowest it can go to would be 4.97T, but nothing stops it from going down 25% or 50%, correct me if I am wrong.

But 70eh went off line.

So how much comes back?

If the question is just how much and not "when", then it really all depends on the price of bitcoin, given that the Chinese have an average of 2-3 cents per KhW ( accounting for the hydro season) it will be close to impossible for these gears to be profitable elsewhere, which means many many gears won't find a new home at current prices.

If the price spikes and we are able to create a brand new equilibrium, then all gears will come back online elsewhere, but for that to happen 6-7 cents running 90w/th gears have to be profitable at full blast and not just the current difficulty, and quite honestly I don't see that happening anytime soon.

If it is a question of "when" can that happen, it will take a very long time, maybe next year at best, I see people talk about the fact that all gears in China can run on a 4-6GW which relatively is a small number, but they fail to understand that building infrastructure for such capacity is a huge thing which can't be achieved in a few months.

[kano]

...
If it is a question of "when" can that happen, it will take a very long time, maybe next year at best, I see people talk about the fact that all gears in China can run on a 4-6GW which relatively is a small number, but they fail to understand that building infrastructure for such capacity is a huge thing which can't be achieved in a few months.

The only slow part is getting power connect (in EU/USA/Iceland/Canada) though it doesn't take 6 months to get transformers, if power is available.
No idea if it is slow or not in other countries.

Building capacity is very quick - I've seen it done from the ground up in weeks, not months.
6 months would be some noob who had no idea what they are are doing.
In this case they already have done it at least once before ...
Often also, the basic structure already exists from previous factory use, so that can speed it up also.

[mikeywith]

Building capacity is very quick - I've seen it done from the ground up in weeks, not months.
6 months would be some noob who had no idea what they are are doing.

Well, if you throw enough money at it, it could happen sooner, but this assumes that every future mining farm has to start building now for that to happen which isn't happening, as far as I know, we are talking about re-locating a few hundred thousands of mining gears, building the infrastructure for that is going to take a lot of money and time.

My guess is that most new mining farms outside of China will be owned by the Chinese themselves, judging by the gear prices and the current supply, there does not seem to be a lot of panic, it seems like most miners are still holding on to their gears and probably are already searching for a new home.

The problem is, it isn't just a matter of moving to a country with a cheap power rate, most of those countries are corrupted or don't have enough power, to begin with, the rest can be either hard to move to due to regulation and shit or are not so crypto-friendly, with all the carbon footprint b.s that has been going on, moving these gears won't be easy and I am pretty positive that the majority of hashrate that left will not show up till next year at best.

The only expectation would be BTC going to 100k-200k, demand on mining gears rises everywhere and those many gears get divided between small miners into small batches rather than whales shifting their operations, but as it stands right now, most of those gears are "homeless".

[kano]

...
Often also, the basic structure already exists from previous factory use, so that can speed it up also.

Also, hash rate seems it might have picked back up a bit ...

[Quickseller]

and there is a decent chance it will drop by the maximum 25%.

Are you sure the maximum is 25%? I thought the new difficulty can't fall below 25% of the previous, since the current diff is 19.9T, the lowest it can go to would be 4.97T, but nothing stops it from going down 25% or 50%, correct me if I am wrong.

I am not sure I am understanding what you are asking.

Each difficulty period, the difficulty cannot change by more than a factor of 4. This means the difficulty cannot increase by more than 400%, nor drop by more than 25% from one difficulty period to the next. This means that if it took five weeks to find 2016 blocks, the difficulty would only drop by 25%. All else being equal, if this were to happen, it would take about 3.75 weeks to find the next 2016 blocks, so the difficulty would decrease by an additional 25% at the end of the following difficulty period.

[mikeywith]

Often also, the basic structure already exists from previous factory use, so that can speed it up also.

Ok let's just pretend there are enough previous factories ready to host nearly a million mining gear.

Each difficulty period, the difficulty cannot change by more than a factor of 4. This means the difficulty cannot increase by more than 400%, nor drop by more than 25% from one difficulty period to the next. This means that if it took five weeks to find 2016 blocks, the difficulty would only drop by 25%.

I have a strong feeling you are wrong, based on this code which enforces the difficulty adjustment limit

Code:

if (nActualTimespan < nTargetTimespan/4) nActualTimespan = nTargetTimespan/4; if (nActualTimespan > nTargetTimespan*4) nActualTimespan = nTargetTimespan*4;

It means the difficulty adjustment can be anything equals or less then 75% to the downside.

So for simplicity, a 10T difficulty can change to any number between 2.5 and 40, unless i am reading code wrong which is unlikely but i got old anyway.

[kano]

...
Each difficulty period, the difficulty cannot change by more than a factor of 4. This means the difficulty cannot increase by more than 400%, nor drop by more than 25% from one difficulty period to the next.
...

I posted the details of that the other day here:
https://bitcointalk.org/index.php?topic=5307087.260
Limits are +300% and -75%