Sichuan Floods Expose Key Risk for Bitcoin Miners

Extreme weather conditions are being blamed for a dip in the global hashrate. Published charts suggested a 30 percent drop in the hashrate and this is being attributed to the recent flooding in China.

According to reports in The FT, the downpour at the end of last month exposed a key risk for the sector. The flooding in Sichuan province left hundreds of thousands of people homeless and destroyed many mining farms. The region is a hub for crypto miners due to its low power costs and a cheap hardware market.

China accounts for nearly 70 percent of the world’s Bitcoin mining activities, with Sichuan being declared ‘Bitcoin mining capital’, Bitcoin’s biggest mining pool, Antpool, is based in China.

Other observers are split on the explanation for the fall in hashrate, attributing the dip to a combination of the flooding, a heatwave in Europe and the lower price of bitcoin. Morgan Stanley analysts estimate that the Sichuan floods could only impact up to 8-10 percent of global bitcoin mining activity.

The debate over the reason for the hashrate decline is likely to rumble on for some time. However, what is certain is that the Chinese dominate the crypto mining industry and the concentration of activity in a region susceptible to frequent flooding, the province was also heavily affected by flooding 2013, there exists a significant ‘key man risk’ for the wider industry.

Bitcoin Hashrate

Despite the hashrate dropping due to the floods the hashrate has bounced back and is recovering, as shown in the chart above.

Senate Banking Hearing on Facebook’s Libra; 0.25% of Algorand Tokens Sell for $60 Million

The top daily news from the cryptocurrency and blockchain space:

  • The Senate Banking Committee books hearing on Facebook's Libra cryptocurrency.
  • Bitcoin developers to get 50 bitcoin (BTC) in funding.
  • 0.25% of Algorand's ALGO tokens sell for $60 million.

At the time of writing, bitcoin (BTC) and ether (ETH) are trading at $9,294.1 (+1.5%) and $269.5 (+0.6%), respectively. As for the MVIS CryptoCompare Digital Assets 10 Index, it is currently tracking at 4,314.6 (-0.2%).

 

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Senate Banking Committee Books Hearing on Facebook

The U.S. Senate Banking Committee announced it will hold a hearing on July 16 in order to question witnesses over Facebook’s new cryptocurrency and blockchain project, Libra. As of press time, it has not yet been publicly disclosed which individuals will testify before the Committee.

The hearing – entitled ‘Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations’ – was scheduled just days after the social media giant officially revealed its plans regarding Libra and its new Calibra subsidiary.

Fund to Support Bitcoin Developers with 50 BTC

Primitive Ventures’ Dovey Wan has gathered 50 BTC – roughly $450,000 – on behalf of non-profit organization Hard Core Fund in an effort to sustainably fund Bitcoin developers.

When discussing why she decided to pursue the initiative, Wan told CoinDesk, “right now, you wouldn’t believe it, there are less than 10 full-time bitcoin developers... We want to fund full-time independent bitcoin developers.”

Established in 2018, the Hard Core Fund is managed by Pan Zhibiao, a former Bitmain employee. Wan – who serves as the executive director for the fund – is the only other team member listed on its website.

0.25% of Algorand’s ALGO Tokens Sell for $60 Million

Algorand – a scalable, secure and decentralized digital currency and transactions platform – closed its first Dutch auction with a clearing price of $2.40 per Algo (ALGO) token, the native token of the Algorand blockchain platform.

The auction was administered by the Algorand Foundation, which, in a blog post on Wednesday, said that it now stands as “the first organization to conduct a fully transparent global auction on its own blockchain.”

In total, a paltry 0.25 percent of ALGO’s total supply was sold to successful bidders for $60.4 million. Notably, the Algorand Foundation will – in exactly one year’s time – offer redemptions on tokens at 90 percent of the $2.40 clearing price.

The completion of the inaugural ALGO auction signalled the mainnet launch of the Algorand, also. It was first unveiled by MIT professor and Turing Award winner, Silvio Micali, in early 2017.