Bitmain, traditionally one of the biggest cryptocurrency mining operations, has revealed that are generating 88 percent less computing power than a month ago, suggesting that the industry giant has cut back on capacity.
It is no secret that the mining business has been under pressure through the long bear market of 2018, even seeing Nvidia’s boost in revenue falling back as miners pulled away. However, Bitmain, a company that grew to prominence under Jihan Wu, has tried to ride out this rocky season.
Even with the positivity in the market returning, and mining getting more profitable again – with thanks to decreases in difficulty as well – it appears that the mining market is still a tough place to work in.
Decrease in computing power
According to the Hash Disclosure, put out each month by Bitmain, the hash rate of all Bitmain-owned hardware running the SHA265 algorithm – which the Bitcoin and Bitcoin cash networks are based on – had dropped to just 237.29 quadrillion hashes per second (PH/s). Just a month ago, it was at 2,072 PH/s.
Part of this drop in mining power has seen Bitmain’s own dominance also fall as the company now only boasts just 0.4 percent of Bitcoin network’s total computing power from four percent at its peak.
It is interesting to note that this decline in computing power is not because of a general decline in the Bitcoin hash power as that reached a six month high of over 58,000 PH/s on May 2, according to data from blockchain.info.
Indeed, even the profits being made from network fees are on the rise again. Out of the $291 million Bitcoin miners earned in April, $14 million was solely attributed to the network fees that continue to rise.
A tough business
Bitmain have not been forthcoming as to why this has happened to their business with a spokesperson telling Coindesk:
“It is [in the] natural course of the mining business where the hash rate owned by one body at one instant may be owned by someone else at another instant,” the spokesperson said.
It was even expected that the miners in China would be looking to profit from the onset of the rainy season where they would be able to take advantage of cheaper rates for hydroelectric power.
As recently as March, Bitmain was said to be planning to deploy $80 million worth of its own machines this summer to utilize the added hydroelectric power.