Compute North CEO Dave Perrill told The Block that Bitcoin’s hash rate—a measure of the computing power devoted to mining the cryptocurrency—might not recover from China’s move to shut down crypto mining operations until some time in 2022.
“We may not see the hash rate go back to the all-time-high level until Q2/Q3 next year,” Perrill told The Block. “That’s my hunch.” But, of course, he also expects Compute North to help with that recovery: The company, which hosts mining equipment for its customers, expects to have a total capacity of 1.2 gigawatts within the next year.
Blockchain.com data indicates that Bitcoin’s hash rate peaked at 180.66 million terahashes per second (THps) on May 13. It quickly dropped as China’s crackdown on mining operations expanded to more provinces in June, however, until it stabilized at 84.79 million THps on July 2. Now it’s starting the slow climb back up.
Bitcoin’s hash rate is likely to increase as Chinese mining operators sell their gear or move their businesses to more permissive countries. Mining the cryptocurrency has also become easier due to the decreased hash rate, which could inspire others to start their own mining operations, thereby increasing the hash rate as a result.
Efforts to mine Bitcoin using repurposed hydroelectric plants, volcanic energy, and other relatively clean sources of large amounts of power could also help the hash rate start to recover. But Perrill warned that for large-scale operations like Compute North, “it’d be a challenge, if not impossible, to be 100% renewable” at this time.
It took Bitcoin over a decade to reach the 180.66 million THps hash rate, it took less than a month for the hash rate to fall to less than 50% of that peak, and now Perrill has predicted it will take a year for it to climb back to its previous high. So now the question is how long it might be until the network comes up to another cliff.