Bitcoin’s hashrate has fallen by more than at any time this year from 54 quintillion to 47 quintillion.

The daily hashrate seems to show fluctuations within an expected range, but the 7 days average measure shows a significant drop starting on or around November the 4th.

Bitcoin’s hashrate drop, November 2018.

The reason for it is not very clear, especially considering that bitcoin’s price has been relatively stable. It may perhaps be due to BTCC closing, but they only had circa 1% of the hashrate while this is a 13%  fall, dropping to its lowest level since August when it first reached 47 quintillion.

There is constant fluctuation as can be seen, especially since August, but this is the biggest percentage drop for the year and perhaps more.

It may be related to the on-going Bitcoin Cash spectacle where a chain-split is now to occur on November 15th.

It appears Craig Wright does have some reasonable amount of hashrate, with it used in a display yesterday when his BMG Pool mined five 32MB blocks.

BCH’s hashrate distribution, November 2018.

Craig Wright’s affiliated pools managed to gain about 53% of BCH’s hash, with their share then falling presumably because they sent it back to BTC. Wright said:

“When we move our hash off BTC into BCH (oh I forgot to say that we are there too) the BTC mining hash drops and suddenly BTC mining is MORE profitable.

Stay on BCH as we will and lose big time… Think of this as a short term gift to mining BTC.”

Presumably BCH’s hash would fall as well because some of it would go to BSV, but he has said there won’t be a chain-split, just a 51% attack on BCH.

Why a miner would want to attack the coin that gives it money, is not very clear. There are suggestions through that they think that if they gain more than 51% – like they just did – then miners would somehow switch to BSV.

That’s obviously not how any of this works. ABC has its own rules which kick in on November 15th. The first block to be mined with the new ABC client creates a split if older ABC clients are still mining or if BSV clients are mining.

There is no way to stop this upgrade or to make anyone go to BSV. Freedom rules here as does complete free choice.

A 51% attack may cause some turbulences, but as Nakamoto himself said, it would be completely pointless. Maybe Craig “I AM Satoshi” Wright has forgotten what he himself claims to have said, but actual coders know very well that he would be wasting his own time and his own money and perhaps Calvin Ayre’s money.

BTC, BCH, 3 hours hash estimate, November 2018.

What Ayre needs to consider is first some real technical expertise. And second, he needs to consider how he’ll manage to mine the first BSV block.

That’s because miners follow price, meaning BSV would get about 10% or 20% of BCH’s hashrate.

Difficulty adjusts by block, so if we simplify and say that 20% would find one BCH block per hour, worth lets say at a price of $450 some $5,600, that 20% would also get one BSV block per hour initially, worth $1,200 at a price of $100 per BSV.

After the first block then difficulty starts adjusting. If Ayre sends all of his hash to BSV, then he’d basically be getting 4x less for it than if it is split according to which is more profitable to mine.

So Wright or Ayre might have at most about 62% of BCH’s current hashrate. He’ll need about 20% for BSV. The rest is just 40%.

If instead he is really mining on BSV clients, then his entire hashrate might go to BSV where blocks would be produced at a far higher cost than their market rate.

In BCH, as that hashrate would have left, then mining would become more profitable than in bitcoin. Some of BTC’s hash, therefore, might go to BCH and some of BCH’s hash might go to BSV. However, as both BCH and BSV adjust by block, a hash equilibrium would probably quickly be found.

Meaning neither coin would have higher profitability, not even bitcoin which adjusts every two weeks, except for maybe in the first hour or two prior to difficulty adjusting.

Bitcoin might however see a hash drop, as it already has. That may make blocks a bit slower to find, but it then adjusts as usual.

All of it meaning we might see some popcorn shortages in the next few days as the show now begins with the first chain-split of a chain-split to unfold this Thursday.

What do you think?

211 points
Upvote Downvote

Written by Ravikash

Leave a Reply


Coinbase has raised $300 million in a series E funding

Vocean, Starting the Trillion Crypto Bond Era