Bitcoin’s network hash rate has returned to normal levels again, days after freezing temperatures across the US put a strain on the country’s power grid – leading to a temporary drop in hash rate.
In the days leading up to Christmas, bone-chilling temperatures swept across the US, leaving millions without power and claiming at least 28 lives.
According to reports, Bitcoin (BTC) miners in Texas, which account for a significant portion of the country’s hash rate, have voluntarily reduced their operations to feed electricity back into the grid – so residents can keep their homes heated.
The disruptions appear to have put a dent in Bitcoin̵[ads1]7;s hash rate, which typically hovers around 225-300 Exahashes per second (EH/s). This fell to 170.60 EH/s on 25 December.
As of December 26, however, the hash rate has returned to 241.29 EH/s, according to data from hash rate mining calculator CoinWarz.
Bitcoin’s hash rate is calculated by measuring the number of hashes produced by Bitcoin miners trying to solve the next block. It is seen as a key metric to assess how secure the Bitcoin network is.
The latest events asked for a controversial statement by FutureBit founder John Stefanop, who suggested that the drop in hash rate was due to a number of “highly centralized mines” in Texas shutting down at the same time.
“I know, doesn’t change the fact that a few big mines in Texas affect the entire network by 33% … all transactions are now confirmed 30% slower because the hashrate is not decentralized enough,” he said.
“If the hash rate was distributed evenly around the world by tens of millions of small miners instead of a few dozen massive mines, this event would not even have registered on the network,” Stefanop added.
However, Bitcoin bull Dan Held refuted Stefanop’s view of the events, argued that weather patterns do not imply centralized ownership or control.
According to the Cambridge Bitcoin Electricity Consumption Index, the US accounts for 37.84% of the average monthly hash rate share. The top four states in the country for Bitcoin mining include New York, Kentucky, Georgia and Texas – all of which had experienced power outages due to the winter storm.
However, Dennis Porter, CEO of Bitcoin miner Satoshi Action Fund noted to his 127,400 Twitter followers on December 25 that while the bad weather, especially in Texas, caused 30% of Bitcoin’s hash rate in the US to go offline, the network “continues to function perfectly.”
Now imagine if Amazon or Google tried to shut down 1/3 of their data centers. pic.twitter.com/G49iqBZXDL
— Dennis Porter (@Dennis_Porter_) 25 December 2022
Cheap power and favorable mining regulation in Texas has led to a Bitcoin mining boom in Texas in recent months, which now hosts some of the largest mining companies in the world.
Among these Riot Blockchain, Argo, Bitdeer, Argo, Compute North, Genesis Digital Assets and Core Scientific – which recently received a $37.4 million bankruptcy loan to stay afloat.
Related: “There’s a lot less land to go around” – Why White Rock established off-the-grid mining in Texas
However, recent weather events have only added to Bitcoin mining companies’ list of headaches.
The bear market has plagued Bitcoin mining companies with $4 billion in debt, according to recent data.
Many notable US-based mining companies have also filed for bankruptcy in recent months, while many other companies are approaching nearly unaffordable debt-to-equity ratios that require immediate restructuring.
The tragic weather events have not affected the price of Bitcoin so far, which is currently priced at $16,826 – down just 0.27 in the last 24 hours.