Cryptocurrency mining equipment manufacturer Bitmain may try to put on a happy face and tell the world that everything is going well, but there’s one thing about the truth—it cannot be suppressed forever. Eventually, it makes its way to the surface and all those attempts to hide what is really going on behind closed doors only leads to resentment, bitterness and lack of respect. Bitmain is finding this out the hard way, as there has been yet another development that shows the company is nowhere near as strong as it has tried to make everyone believe. Its own internal mining operations are generating 88% less computing power than they were a month ago.
This means that the company has cut back on capacity, which isn’t necessarily detrimental on its own—companies alter production all the time. However, an 88% drop, looking at the other factors surrounding Bitmain’s operations, makes the drastic change much more suspect. Apart from coming under fire for possibly having swindled investors out of their money when it decided not to move forward with its initial public offering (IPO), the company also just lost the main figure behind its S9 mining rig, leaving it without any real talent to move innovation forward.
While companies alter production, it’s usually tied to market activity. The changes in Bitmain’s hashrate don’t seem to follow the same pattern. Last October, Bitmain’s hashrate was 2,339 petahashes per second (PH/s). This was greater than the 1,692 PH/s seen the previous June. This coincides with the market slide when prices were falling or, at the very least, not rising. This past March, when the market was recovering, Bitmain’s hashrate dropped to under 1,700 PH/s.
As a result of the drop, in addition to other factors, Bitmain now only has a 0.4% share of the computing power for the Bitcoin Core (BTC) network. This is down from the 4% it saw in 2018, and represents another major change at the company. If the hash power was generated from the company’s A9 rig, which was reportedly always the only rig that actually worked, with its 14 terahashes per second capability, Bitmain has cut off 130,000 rigs from its mining pool.
What this ultimately means for the company cannot be ascertained based only on this information. Bitmain will try to say that it’s only “normal” for changes like these to occur, the same way it will say that it’s only “normal” for a company to report major revenue losses to financial regulators while telling the public that production is better than ever.
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