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Floods in China Wrecks Havoc: Bitcoin Mining Centers not Spared

 

Heavy flooding in the province of Sichuan, China is reported to have destroyed a couple of Bitcoin mining centers. According to Eric Meltzer of INBlockchain, reputed to be the largest blockchain-focused fund in China, it was rumored that a Bitcoin mining center was not spared in the havoc floods in China left in its wake.

 

Reports reveal that earlier this week, Meltzer shared a photograph of a cryptocurrency mining facility that was in a deplorable state, showing stacks of ASIC miners that were affected by heavy floods that swept most parts of China over the past few days.

 

The Chinese News Service (ECNS), the second largest state-owned news agency in China, reported: “From Wednesday to Thursday, heavy rain hit Anhui, Jiangsu, Sichuan, Shandong and Jilin provinces. Caolaoji, Anhui, and Dafengzha, Jiangsu were the most heavily hit, the State Flood Control and Drought Relief Headquarters said.”

 

INBlockchain has over the last couple of years made significant inroads into the cryptocurrency investments market in Asia. The company is noted to have invested in a variety of cryptocurrencies including Bitcoin, Ethereum, OmiseGo, EOS, Decentraland, Zcash, Status and Qtum.

 

 According to the data provided by Blockchain, the second most widely utilized cryptocurrency wallet platform behind Coinbase, the hashrate of Bitcoin temporarily dropped from 43 million TH/s to 30 million TH/s, by more than 30 percent overnight. While volatility in the hashrate chart of bitcoin is expected, the sudden drop in the hashrate of Bitcoin was sufficient to alert investors and analysts.

 

Over the past 24 hours, the hashrate has rebounded to 40 million TH/s after its initial 30 percent drop, and analysts have attributed to the decline in the hashrate of the Bitcoin network to the Sichuan flood incident.

 

The correlation between the floods and Bitcoin`s Hashrate

 

During a discussion about the Sichuan Bitcoin mining facility case with local analysts, Meltzer stated that the theory China-based analysts have on the Bitcoin hashrate drop is a combined effect of the flood in Sichuan and increasing heatwave in Eastern Europe causing mining centers with low profit margins to generate even less money.

 

A significant number of Bitcoin’s hashrate originates from mining pools such as BTC.com, AntPool, and ViaBTC, which outsource computing power from ASIC miners globally. Hence, while a large mining center in Sichuan may have shut down due to poor weather conditions, it is not sufficient to have any real impact on the hashrate of bitcoin.

 

Presently the buzz about the floods in Sichuan and the destruction of large-scale mining centers by strong floods and heavy rain are yet to be confirmed by local authorities. Local analysts have however emphasized that even if the flood wiped out a major mining facility in China, it should not be enough to trigger the hashrate of Bitcoin to fall by 30 percent in a short period of time.

 

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