The Bitcoin Hash Rate was down as a result of the Xinjiang blackout. One province in China represents a significant share of the Bitcoin network.
Jared Tate stated in his thread: I have warned for years about this being biggest threat to BTC. The Bitcoin difficulty bug does not allow diff changes to happen quickly enough. Digibyte fixed this in 2014 & many chains including Dogecoin adopted DigiShield. Average BTC block time is now pushing 20 min.
The Bitcoin adjustment not only limits how far it can move, but it takes 2016 blocks to make an adjustment. That’s 4 weeks at 20 min blocks.
He pointed to a September 24, 2019 video stating how he has explained it all in a short video in 2019. In the video, Jared has made it very clear as to why the difficulty bug could kill $BTC, what a “difficulty adjustment” is and how #DigiByte fixed this issue in 2014 & numerous blockchains followed our lead. Including #dogecoin #ethereum #bitcoincash etc.
Some feel that the Xinjiang grid going down and its effects on bitcoin hashrate are what economists call a “natural experiment”.
Some stated 40% is a significant drop and that it should be more decentralized.
Someone was left wondering, should we expect longer block times until the next difficulty adjustment? Then boom if they come back online after a reduction in difficulty will they then make more profit? Tin foil hat mode wonders if it’s a setup.
Providing a clarification another user stated, they wouldn’t make more as they would lose all the profit from this time period. If their hash rate is 30% of the network, they are getting 30% of the profits while it runs. That’s it.
Another user expressed, While the hash rate would closely follow the price movement, the opposite isn’t always true. The drop in hashing power does not always result in a drop in the Bitcoin price. In Oct 2020, the hashing power went down, but the price of Bitcoin kept going up.
The sudden drop in hash rate in Oct 2020 could be due to: 1. Mining pool relocation 2. Power outrage in a mining location 3. Closure of a mining pool whatever the reason was, it was picked up by other miners very quickly.
During the Bull Run, the hash rate goes up with the price and any drops in the hash rate should be recovered very quickly. If the hash rate doesn’t recover quickly followed by the Bitcoin price dip, it might indicate the end of the Bull Run in a cycle.
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