Posted 2 years ago | by Ben Armstrong
Chinese Crypto Miners Obliterated By Flood-Bitcoin Hash Rate Soars to Record
Due to extreme weather in China’s Sichuan province last week, crypto miners and local hydropower plants were forced to halt operations. Although torrential rains flooded parts of the mountainous Aba prefecture, causing at least seventeen mudslides in the region, the worst hit area was Wenchuan.
As a result of the severe weather, several major cryptocurrency mining facilities were destroyed. In addition to the impact on cryptocurrency, local power stations and communication infrastructures were severely damaged. Footage of the destruction has been posted on various Twitter accounts.
Widespread Damage in China
At the moment, it is still unclear how many bitcoin miners were pushed offline last week. Damage is still being assessed, especially as the rainstorms led to dangerously high levels of water in local reservoirs used by local hydropower plants.
The ongoing situation caused the power stations to reduce energy generation, which in turn, stops the provision of energy to miners. The establishment of facilities in flood prone zones is due to the low price of hydroelectricity in Wenchuan,
The economic impact of the flooding may be observed in the Bitcoin mining data from Aug. 19 to 21 [period of the flooding] which showed a slight move down in the hash rate. Even though there was a slight dip, the data indicates that the hash rate of blockchain remains resilient, even in the face of severe weather.
This is in contrast to last year, when the hash rate plunged -35% from October to December. Now the hash rate is setting new record highs, as demonstrated by its record-breaking performance during the summer. Last Sunday, it hit an incredible 76 TH/s.
Bitcoin Price Bounces
Bitcoin prices have been under pressure in the last week. BTC prices in USD terms have fallen from the $10,250 level, to as low as $9,430. Over the weekend prices have recovered somewhat, and BTC prices are hovering around the $9,700 level at the time of writing.
Market commentator Max Keiser proposed that BTC prices have upside potential, given they have tracked the Hash Rate higher in the past.
— Max Keiser, tweet poet. (@maxkeiser) August 8, 2018
Bitcoin prices have also acted as an early warning for dislocations in the fiat currency markets, which may signal that for the moment, there aren't any major threats on the horizon.