Trick or Treat: BTC Hash Collapses by 30%

Brief weekend update on BTC. Network Hash has collapsed by 30+% resulting in high fees and very slow transactions. The reason for the hash collapse? Chinese miners who rely on hydro power are no longer receiving plentiful cheap energy as China enters the dry season. The increase in energy cost results in less profitable miners shutting down and a collapse of hash rate. This seasonal adjustment recurs every year although you can see the cycle is more dramatic each time.

 

When miners turn their machines off this results in less processing power, delayed transactions and higher fees. Examples below:

Fees on BTC (if you want your transaction processed in 20 minutes you’d pay a $8.30 fee with some people are paying over $100):

BTC vs BSV fees. While BTC fees are over $8 for a 20 minute transaction BSV is running zero confirmation instant transactions for less than a penny.

While this issue on BTC is temporary and relief should come in ~3 days when the network adjusts for the new lower hash rate the problems shows the precarious nature of the BTC network and small blocks. Any increase in transactions or reduction in hash results in a slow and expensive network that is unusable for all but the super rich or super patient.

Shockingly, the BTC team thinks this is what Satoshi intended when he designed Bitcoin.

Never interrupt your enemy when he is making a mistake.
-Napoleon

Finally, here is a rich bit of comedy gold showing how disconnected the BTC crowd is from Bitcoin.

 

About coinspeak

20 years as an IT consultant. Escaped the rat race in 2015. Addicted to travel and tacos.

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