The Coronavirus pandemic 😷 is within a few hours of reaching the number of 1 million infected worldwide. What has generated that many governments have implemented the quarantine. As this has undoubtedly affected workers at large Bitcoin mining farms, primarily located in China 🇨🇳.
China is just days away from starting operations again, as they have exponentially reduced their number of infected daily, or at least that’s the official information from the Chinese government. However, the number of cases outside China is already almost 8 times higher.
With this in mind, it is normal to wonder to what extent Bitcoin mining is being affected by the Coronavirus. Since the operators of the main mining farms are not immune to this world crisis.
But this has affected not only Bitcoin (BTC) mining and other cryptocurrencies, but also the entire normal life of humanity. It does not matter religion, geographic area, skin color or age. Most of humanity should be inside their homes.
How is it being affected Bitcoin mining by the Coronavirus?
On March 26, the Bitcoin Hash Rate had a major setback, falling 16%. In total, over the course of the year, the computing power of the world’s leading cryptocurrency has fallen by 45%. And fears for the security of the Bitcoin Blockchain network increase.
The Hash rate dropped from 136.2 quintillion EH / s reached on March 1, to just 75.7 EH / s, according to the well-known Blockchain.com portal.
On the other hand, the other crypto firm in charge of investigating the different Blockchain networks on the cryptoverse, obtained similar findings.
“The peak in this year 2020 is 150 EH / s, and since then it has shown a decrease of more than 30%.”
This drop has also impacted the mining difficulty, which went from 17 billion to 14 billion in less than a month. Which confirms the suspicion that a large number of miners around the world have disconnected their machines.
Hash rates and mining difficulty are directly correlated. Both make up a cycle called the “miners capitulation cycle”.
Simply put, as mining difficulty increases, crypto miners with low-powered equipment are forced to sell their savings to continue producing BTC. This causes an increase in the total supply of Bitcoin. But, when the miners cannot compete, they leave the market, and this leads to a decrease in the Hash Rate.
Which makes Bitcoin mining easier, more profitable, and the cycle begins again.
Coronavirus 🦠 or Halving ⛏?
But, the truth here is that the results of the Coronavirus pandemic have not been the only ones to influence that the computing power of the network has been reduced. There’s another happening around the corner, BTC’s Halving, which has historically caused miners to exit the crypto ecosystem.
Separating the negative impacts of Coronavirus and Halving is almost impossible at this time. The only thing we can notice is that the two of them could be attacking the crypto mining ecosystem, but in different and unique ways.