The total computing power on the Bitcoin network has fallen to the same level it was six months ago. This is because the Chinese government is shutting down large mining farms in the country.
Above is the 7-day average of tera hash per second. At the moment, this average is 125.13 TH / s, which is the same level as on November 17, 2020.
China is responsible for the decline
The recent legal restrictions on bitcoin mining in China appear to be the main reason for the low hash rate (such as computing power). China has taken steps to make it as difficult as possible for large mining companies. With this move, China is also banning financial institutions from using crypto services.
Sichuan Province is an important region for Chinese miners due to the abundance of energy from hydroelectric power stations. Unfortunately, this is the latest province to issue an order to stop mining. The Sichuan Energy Bureau and the Sichuan Development and Reform Commission issued a joint document to subjugate state-owned enterprises on Friday.
These measures will directly affect the 26 mining companies that have attempted to cooperate with the government, and those that have settled in designated industrial zones and are registered with the government.
Not everyone listens
There are still a large number of bitcoin miners operating in Sichuan and Yunnan, but they get their energy supplied privately from smaller power plants. These fall through loopholes in the law. This so-called direct supply model is a common and gray area, because it bypasses the state grid as a medium for power distribution.
But to be honest, it seems only a matter of time before the Chinese government stops this as well. Meaning that it already exists, miners have to register and settle in certain areas. These regions use state power and Chinese legislation has a direct impact on this. It is not known why some companies have not responded to this.
Below is the hash distribution among large mining pools. A month ago, Antpool was the largest at 15%, but the daily chart shows it slipped to third place. As a result, there has been a major shift and F2Pool is now the favourite.