The hash rate of Ethereum has fallen by more than 25% since it peaked in mid-May.
It can be argued that this is the direct result of China’s crackdown on crypto-mining and the resulting mass exodus of mining operations.
According to Bitinfocharts, the hash rate of the Ethereum network reached an all-time high of 585.5 TH/s (terahash per second) on May 20.
In the weeks that followed, the hash rate fell to its lowest level in three months at 434.3 TH/s.
The 26% drop in just six weeks was one of the steepest declines in Ethereum’s history.
Just 40 days after the hash rate reached its peak, it fell by 17% in just 10 days.
This is the worst 10-day drop in the history of Ethereum, according to data from Glassnode.
During the crypto winter of 2018, the Ethereum hash rate dropped by 57%, but the drop was over several months.
Ethereum miners fired:
Hashrate, a measure of grid computing power, is closely related to the price of Ethereum.
As the value of the coin increases, mining becomes more profitable, attracting mining resources to the network and boosting the hash rate.
William Foxley, managing editor at Compass Mining, a Bitcoin mining company, believes that GPU-based Ethereum mining is harder to suppress than ASIC mining.
GPUs can be placed in small locations that are less likely to be found by the government.
However, China-based Sparkpool, the second largest Ethereum mining pool, has seen a nearly 30% drop in hash rate since the ban was issued.
Things get interesting for China’s Ethereum miners, who not only have had to bear the reduced fees for EIP 1559, but now also move geographically from larger industrial facilities.
The move to Ethereum and Proof of Stakes will eventually phase out all Ethereum miners, but there could be a few tough months ahead for ETH miners.
Hydroelectric power stations are going cheap:
In a related development, a report from SCMP reported that small hydropower plants are now up for sale on e-commerce websites in China.
As demand for cheap energy dries up, and miners move to friendlier climates, the price of power generation fixtures has fallen.
Many of the stations are located in southwest China’s Sichuan Province, a region in China with abundant water resources that can provide cheap electricity.
But this capacity will not be allowed to be tapped as the order came to shut down 26 bitcoin mining operations in the province earlier this month.