Bitcoin and Ethereum Mining Suffering Due to Chinese Miners

We tried to figure out how Bitcoin miners feel today after massive bans on mining cryptocurrencies in China and what happened to Ethereum mining in June by looking at revenue figures.

Bitcoin and the exodus of miners

Against the backdrop of restrictions for Chinese miners and their mass "migration", the difficulty of mining the main cryptocurrency on the market will fall by 27%. This forecast is provided by the Bitcoin Difficulty Estimator service.

Bitcoin hash rate is automatically adjusted after every 2016 block found (approximately every 2 weeks). This is due to the fact that when new miners are connected to the network, blocks begin to be produced faster than expected, and the complexity of their production increases in order to “equalize” this speed. But imagine what will happen if tens and hundreds of thousands of devices previously connected to it leave the system at the same time.

The actions of the Chinese authorities have become a real headache for the crypto community. First, they hit the price of the main cryptocurrency asset, dropping it below the $30,000 level on Binance, at the same time becoming the catalyst for the collapse of its hash rate. Although the latter hardly surprised anyone, given the fact that China accounts for about 65% of the total hash rate of Bitcoin.

One of the founders of the LAZM mining center, Roman Nekrasov, clarified that 27% is not even the final figure and the drop may turn out to be even more significant. According to his forecasts, if the current hashing rate of Bitcoin does not change in the next two weeks, then by mid-July the difficulty of its mining will drop by another 20%.

But there is also some positive news. At the very least, such a drop will be able to “offset” the recent crash in Bitcoin prices, helping to increase the income of miners from outside China by 1 Terahash per day. However, the opposite effect should also be taken into account. There is a chance that the reduction in mining difficulty will bring an additional factor of pressure on the price of BTC. Consequently, according to Nekrasov, in July we may again face a wave of correction.

Ethereum miners are suffering too

The total profit from ETH mining in June was $1.1 billion, which is more than 50% less than in May. At the same time, cash receipts from commissions for transactions made by users amounted to $165.8 million instead of $1.04 billion in May. And their percentage is 15% compared to 43.5% a month earlier.

Naturally, it was not without a reduction in the reward for the miners for the block found. This figure fell from $1.35 billion to $940 million.

Outcome

It is not yet known for sure whether the massive exodus of Chinese miners will play into the hands of the community, but many experts in the crypto industry agree that the United States is capable of intercepting the primacy of the Celestial Empire, becoming the world's main mining hub. In the meantime, Kazakhstan remains the most attractive for miners, as well as the American states of Florida and Texas.

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