Bitcoin Hashrate is Quickly Recovering as Miners are Setting up Farms in New Destinations
The government of China has recently started a crypto mining crackdown in many parts of the country. Following the mining ban, mining operations in provinces like Xinjiang, Yunnan, Sichuan, Inner Mongolia, and others have been put out of commission. At first Chinese authorities shut down these mining rigs temporarily for conducting an investigation.
However, it was revealed that miners were stopped legally from commencing their operations until further notice. Before the mining ban, China was responsible for producing more than 70% of the total Bitcoin hashrate. As more mining farms are opting out of the region, the total hashrate contribution from China has fallen below 50%. These changes were first noticed and reported by the crypto statistics service Documenting Bitcoin.
The researchers at Documenting Bitcoin claim that the United States is the biggest beneficiary of hosting most new crypto mining firms. Many mining enterprises in China have started to look for new mining destinations in foreign territories. The @DocumentingBitcoin also shared a detailed chart depicting how the electricity usage for miners has gone down since the blanket ban on cryptocurrency.
It should be noted that while the government has stopped some exchange platforms like Binance to offer crypto trading services in China, in general, the citizens are free to hold cryptocurrencies. From the third quarter of 2019, China’s hashrate production has gone down from 80% to around 45% in the second quarter of 2021.
The Cambridge Center of Alternative Finance claims that the Bitcoin hashrate from China is now at 46% in terms of global production share. Meanwhile, many miners shifted their farms to the United States, putting the western country in the lead with 16.8% among other new destinations. In 2019, the US only contributed to 4% of the total Bitcoin hashrate, and now it is incremented by 12%. Another data projection by Glassnode indicates that Bitcoin hashrate is now in a state of recovery. When China started its crypto mining ban exodus in May, it greatly affected the Bitcoin price movement. However, it seems that miners have managed to find new territories outside of China, and the Bitcoin hashrate has started to go back to the normal levels once again.
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