The quick decline of bitcoin prices, combined with others factors is causing a mining winter. This is what Mao Shixing, the founder and owner of F2Pool believes. F2Pool is the third largest Bitcoin mining pool. Located in China, they benefit from low power prices. But even that might change now that the winter is coming.
The low prices of bitcoin in the market and the rising price of power in China are the main culprits of a mining winter that is approaching. This is the opinion of Mao Shixing, the founder and owner of F2Pool. He has declared that thousands of miners have turned off their equipment due to the low revenue that the mining activity is getting right now.
F2Pool is the third largest Bitcoin mining pool in the world. This gives them an advantage when researching the market and the state of mining. Mao declared that:
It’s hard to calculate a precise number of miners connected to us that had unplugged. But we saw over tens of thousands of them [shut down] in the past several days based on conversations we had with larger farms that we are in regular contact with,”
so they have indeed confirmed what the hashrate numbers are saying.
Obsolete Miners And Winter
He also said that most of this gear turned off is obsolete or old equipment. Miners with Antminer S7 or even Antminer T9 would be pressed to make gains with this market. He thinks that this phenomenon was caused by the pressure that the Bitcoin Cash Hard Fork exerted over the market. A huge selloff was caused by the BCH holders that got out before the event. This due to the uncertainty of what would happen.
He also commented on the winter in China also helping to bring the mining winter. In winter, hydroelectric power is not effective, and miners have to rely on other power sources. He declared that:
“Electricity costs in China’s mountainous Southwestern region, where lots of mining farms reside, could go below 0.2 yuan. But at this time of the year, that is going up to above 0.3 yuan,”
so these climatic factors also affect the mining revenue.
This mix of factors is causing a mining winter, and the numbers show that clearly. According to numbers of Blockchain.info, the bitcoin hashrate has been declining since the last price drop. And it will remain falling if conditions stay the same.