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Winter Storm Elliott Forces Bitcoin Miners Offline

Miners around the United States were cut off from electricity last weekend when powerful storms tore through North America. Bitcoin’s mining hashrate, which is a measure of computing power in a blockchain, fell by roughly 100 exahashes per second (EH/s), or 40%, to 156 EH/s from Dec. 21 through Dec. 24, data from BTC.com shows. It is back up around 250 EH/s by Dec. 25.

The practice, known as throttling, is touted as a way for miners to assist power grids. Miners maintain stable demand, which guarantees power producers bring in revenues to offset costs, but they may shut down power when other sources of demand are higher, like in winter storms.

The United States and Canada were slammed with a winter storm that sent temperatures down as low as -50degF (-45degC) in Montana, the Western US, according to BBC, and covered Western New York state in up to 43 inches of snow. CNN reported at least 37 people were killed by the storm.

Foundry USA, the largest U.S.-based mining pool, lost over half its hashrate on Dec. 23—the largest drop among all the large pools, according to statistics from mining pools statistics intelligence platform, Mining Pool Stats. Foundry is owned by Digital Currency Group, CoinDesk’s parent company. Some of the largest miners in the US have curtailed operations as well. These include Riot Blockchain and Core Scientific, both undergoing Chapter 11 bankruptcy proceedings.

In Texas, 99 percent of the mining capacity for industrial scale bitcoin operations was shut down on Saturday at 6am, according to Lee Bratcher, the founder and chairman of Texas Blockchain Council, an industry group, in a LinkedIn post. Dennis Porter, who advocates for the industry through nonprofit Satoshi Action Fund, said miners’ cutoff is evidence that it is supporting the power grid. On the other hand, Denis Rusinovich, a European-based miner, tweeted that the large decrease in hashrate is “yet another confirmation that geographic diversification of Bitcoin is essential”.

The world has known for months that over half of Bitcoin miners worldwide will go dark if China clamps down on mining. China has long been a center of bitcoin miners, with past estimates suggesting between 65% and 75% of global bitcoin mining takes place there, but a government-led crackdown has effectively driven out crypto miners from China. Bitcoin mining hashrate dropped from a record-high of 248 exahash/second (EH/s) in February to 216 EH/s as of March 17, according to data from the Glassnode insight platform.

Now, the industry is getting a taste of the effect weather events can have on the Bitcoin mining infrastructure. Mining difficulty is automatically adjusted relative to the amount of computing power in the network, also known as hashrate, in order to maintain the relatively constant time between every block mined to 10 minutes. Bitcoin has been criticized for the high electricity used by mining.

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