70% of China’s Bitcoin mining facility damaged due to heavy floods
Southwestern Chinese province, Sichuan has just been struck with heavy storms bringing damaging floods which have wiped out many Bitcoin mining machines. China is known for being a world-wide leader in Bitcoin mining as they have cheap electricity, excess coal, and most of the leading Bitcoin mining pools situated there. Statistics show that China makes up 71% of the Bitcoin mining hash-rate worldwide with Sichuan hosting 70% of China’s mining facilities.
China has a history of being hit with severe weather events and they were affected by a similar event at almost the same time in 2017. This year, the continuous storms have caused a collapse of nearby mountains which lead to a rapid rise in river heights. The local hydropower and communications facilities were majorly damaged, and the flooding has desecrated tens of thousands of mining machines, effecting the Bitcoin hash-rate worldwide.
The following image shows the extent of the damage in one area of Sichuan.
How has this effected the Bitcoin Network?
Being that China is a worldwide leader in Bitcoin mining, many feared a significant drop in Bitcoin mining hash-rate, and ultimately a potential impact on network stability, transaction processing, and price valuation. Fortunately, these affects appear to be minimal as per the information available online.
As per the information available on the blockchain for global hash-rate, it is evident that there was a recent drop and some significant volatility. Thankfully, the hash-rate seems to have been picked up elsewhere and the uptrend remains intact.
As per the information available at Bitinfocharts for the average transaction fees on the Bitcoin network, things remain stable with an average fee of around 88 U.S cents.
As per the data on the Bitcoin blockchain, the average confirmation time for transaction also seems stable at around 10 minutes for each transaction.
As for price action on Bitcoin, there doesn’t appear to be any significant selling or negative impact in the short term yet, responding to the news. I have been watching a little bull-flag potential setup here on the 4hr charts which could lead to another pop in price.
Assessing the important network factors such as hash-rate, confirmation times, transaction fees, and price action, there doesn’t appear to be any significant drawbacks from the recent news in China. However, it is still very unfortunate to see these mining operations damaged and hopefully the machines can be replaced and restored efficiency and effectively. China is an important body to the Bitcoin mining world and it is in our best interest that they continue to support the network with their massive amounts of computing power.
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