Chinese mining operator Valarhash, which owns Bytepool and 1THash pool, has announced that Bytepool has permanently closed down, while 1THash pool will continue to exist but will become a cloud mining operation where users can rent hash power.
Bytepool used to account for 4% of the total Bitcoin (BTC) mining hash rate in December 2019, and simultaneously 1THash pool accounted for 5% of the hash rate at that time, so collectively these pools used to have 9% of the total Bitcoin (BTC) mining hash rate.
At the time of Bytepool’s peak in December 2019 they found 199 Bitcoin (BTC) blocks in a month, equivalent to roughly 2,500 Bitcoins (BTC) worth over $18 million currently, and during the entire lifespan of Bytepool they found 1,002 blocks equivalent to 12,525 Bitcoins (BTC) worth over $91 million currently. So clearly, Bytepool was a fairly major operation.
It seems the Coronavirus pandemic is the main reason that Bytepool shutdown, and specifically, the fact that Bitcoin (BTC) dived from over $10,000 in the middle of February to as low as $3,850 on March 12, which took a major bite out of mining profits. The mining hash rate took a significant dive due to the Bitcoin (BTC) price crash, as pools like Bytepool turned off their rigs due to no longer being profitable.
The silver lining is that Bitcoin (BTC) has now recovered to over $7,000, and the Bitcoin (BTC) mining hash rate is rising quickly, but it seems to be too little too late for Bytepool. At the least though, it seems Bitcoin (BTC) mining pools are generally firing up their rigs and expanding again rather than closing down, and a mining bloodbath is not anticipated.