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Ethereum network's overall processing power plummets by 17%; Chinese government's anti-cryptocurrency measure likely to blame

The Chinese government's cryptocurrency ban is beginning to affect the Ethereum network.
The Chinese government's cryptocurrency ban is beginning to affect the Ethereum network. (image via Unsplash)
The Ethereum network's overall hash rate dropped from 610,832 GH/s to 505,770 GH/s within a month. It tells us that miners are no longer willing or able to mine the cryptocurrency. This could likely be due to the Chinese government's crackdown on cryptocurrency mining operations within its borders.

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Nvidia, in particular, has done a lot to dissuade Ethereum miners from scooping up its gaming graphics cards by the truckload. Measures such as launching dedicated cryptocurrency mining hardware and reducing hash rates on Ampere-based graphics cards did little to stop that, though. However, there is still some good news in store for gamers on the prowl for GPUs. Some new information from Etherscan.io (via PC Gamer) tells us that the Ethereum network's total hash rate has gone down by 17%.

As of July 5, 2021, the Ethereum network's total hash rate sits at roughly 505,770 GH/s. It is remarkably lower than June 2021's average figure of 610,832 GH/s. That's a reduction of 105,062 GH/s (about 17%), which is is quite significant. To put things in perspective, it'll take over 875,000 GeForce RTX 3090s, which peak at 120 MH/s, to hit that number. Now, this doesn't necessarily mean that a million-odd graphics cards were suddenly pulled out of the Ethereum network. We also have to account for ASICs such as the Bitmain Antminer E9, which are far more efficient at mining Ethereum.

China's crackdown on cryptocurrency mining operations within its borders could be the reason for the Ethereum network's reduced overall hash rate. Some Chinese mining firms have already begun relocating their base of operations from China to the continental United States and neighbouring Kazahkstan. Therefore, this could only be a temporary setback caused by miners relocating to greener pastures.

With the global semiconductor shortage expected to persist across 2021, maybe even 2022, OEMs will still be unable to keep up with the sky-high demand. However, there will come the point when miners flood the market with a barrage of used graphics cards.  That should cause a steep reduction in the prices of graphics cards. It's already happening to a certain degree, but it'll be a while before they retail at MSRP, let alone a discount.

Graphics cards used for mining are usually earmarked and significantly cheaper due to the excessive wear and tear they've been put through. While extensive mining does take a toll on a GPU's performance, one can get most of it back by replacing the thermal paste and the cooler, in some cases.

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Anil Ganti
Anil Ganti - Senior Tech Writer - 686 articles published on Notebookcheck since 2019
I've been an avid PC gamer since the age of 8. My passion for gaming eventually pushed me towards general tech, and I got my first writing gig at the age of 19. I have a degree in mechanical engineering and have worked in the manufacturing industry and a few other publications like Wccftech before joining Notebookcheck in November 2019. I cover a variety of topics including smartphones, gaming, and computer hardware.
contact me via: @AnilGanti, LinkedIn
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2021 07 > Ethereum network's overall processing power plummets by 17%; Chinese government's anti-cryptocurrency measure likely to blame
Anil Ganti, 2021-07- 6 (Update: 2021-07- 6)