Severe flooding in Sichuan! Local miners forced to shut down, Bitcoin network's computing power drops by 25%

Due to continuous heavy rain in the upper and middle reaches of the Yangtze River, severe disasters such as floods, embankment collapses, landslides, and mudslides have been reported along the Yangtze River. Even the mining hub of Bitcoin in Sichuan Province has not been spared from the difficulties, with the disaster severely affecting local miners, leading to a 25% drop in the Bitcoin hash rate.

Sichuan Floods Impact Bitcoin Mining Industry

From June to October each year, Sichuan experiences its rainy season, which significantly reduces mining costs for Bitcoin miners due to the high electricity expenses involved in mining. Coupled with the strong performance of Bitcoin, which broke through the $12,000 mark yesterday (18th), it was considered an optimal time for local miners. However, the overall Bitcoin network hash rate has been declining rapidly since August 14th, possibly due to the recent severe flooding in Sichuan province.

According to a report from China Daily on Tuesday, continuous heavy rain in the upper and middle reaches of the Yangtze River has led to severe disasters such as flooding, landslides, and mudslides along the river. On the other hand, Chinese authorities have observed a rise in water levels in the Yangtze River, prompting the China Meteorological Administration to issue an orange rainstorm warning for several provinces and regions on Monday, including Sichuan, a major hub for Bitcoin mining in China.

The ongoing disasters seem to have dealt a significant blow to Bitcoin miners in China. According to data from Coinmetrics showing a decline in Bitcoin hash rate from 140 EH/s to 105 EH/s from August 14th till now.

Looking at data from major mining pools, the largest contributor to the Bitcoin network hash rate, Poolin, has seen its hash rate drop from 20 EH/s to 16 EH/s, a decrease of 20%. F2Pool and other top 5 Bitcoin mining pools have also experienced drops of around 20-25%.

Despite the sharp decline in Bitcoin network hash rate, the block generation speed of Bitcoin has not slowed down but has remained below the 10-minute target, indicating that the next difficulty adjustment may continue to increase.