By Shelly Melancon (Switzerland)
A report by Cambridge Centre for Alternative Finance (CCAF) has revealed that China Bitcoin hash rate had been dropping since late 2019, even before the ban in May and June 2021. This is at variance with previous reports that the mining hash rate of the flagship cryptocurrency declined in the wake of crackdown by Chinese regulators on mining companies. CCAF’s data report also shows that hash rate improved in other regions.
The assumption had been that China’s unfavorable disposition towards mining operations was responsible for the exodus of miners to other regions, and consequently, reduction in mining difficulty and hash rate. However, with the new report by the Cambridge Centre, experts might have a rethink as to what was responsible for the decline, before China’s active stance against mining began. Perhaps it could have been because China has never been favorably disposed to the idea of cryptocurrencies right from the outset.
China’s Hash Rate Drops to 46%, US Becomes Second-Largest Bitcoin Producer
According to reports, China’s mining hash rate dropped from a high of 75.5% in late 2019 to a low of 46% towards the end of the first quarter of 2021. This was before the mining ban in the second quarter. Within the same 1 year and 6 months period, the US’s share of global mining hash rate increased by four folds. US’s hash rate percentage stood at 4% pre-2021, but spiked to 16.8% in 2021. Although a further increase could be recorded as Chinese miners move to some regions in the country to resume their activities, the US is currently the second-largest Bitcoin producer, as per CCAF’s report.
Central Asian country, Kazakhstan, which is one of the locations miners are considering as they move away from China also has its percentage share increase. Same report places Kazakhstan’s share of global hash power at 8%, making it a major producer of the top crypto asset. However, the report did not account for the percentage shares of other regions where miners are reportedly moving to as well.
Iran and Ukraine Contribute to Bitcoin Mining
Iran now hosts a slew of Chinese miners, though miners have been asked to stop their activities until September, in view of hot weather conditions and power outages the country is facing. Iranian regulators are reportedly cracking down on household miners whose activities they claim affect the country’s electricity grid. The report did not account Ukrainian Bitcoin miners as well.
Meanwhile, China’s ban on Bitcoin mining comes on the heels of its new policy on carbon pollution. China is planning to ‘go green’ by 2060, according to reports. While its mining ban plunged global hash rate and mining difficulty lower, both are gradually recovering as miners resume their activities in new locations. Some experts have called China’s ban a temporary upset, as the global hash rate is diversified and not concentrated in one location, even if the Asian country contributed a bulk. As green Bitcoin mining increases, it is believed that mining will be encouraged in new regions.
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