Mining Hash Rate for Bitcoin Recovers as Chinese Miners Resume Operations
China was a major mining base for Bitcoin miners until it proscribed mining activities in May. The aftermath of the ban was a decline in Bitcoin mining difficulty and hash rate as well as a general price downturn in the crypto market. However, experts have argued that the mining hash rate in China had been declining even before the ban. As of September 2019, China’s share of the global mining hash rate was at 75%.
According to reports, the hash rate is now recovering from the low it plunged to following the ban. This is attributable to the resumption of activities by migrating Chinese miners in crypto-friendly and mining regions. Countries like Canada, Russia, Kazakhstan, Iran, Serbia, including the US have to top choices for the miners leaving China.
Hash Rate and Mining Difficulty Drop Massively, BTC Mining Becomes Easy
From an all-time high of 180 EH/s, China’s mining ban instigated a decline to 84 EH/s. During the mining exile in China, mining difficulty dropped such that mining became more attractive and lucrative for other miners, especially those with low computational power. Essentially, when mining difficulty drops, it becomes easy to mine Bitcoin. As of May, mining difficulty dropped by 28%, which is the lowest decline ever recorded.
As per available data from Blockchain.com, a stable increase on mining hash rate has been observed since June 3. Accordingly, the hash rate has recovered by 21% since then, as miners from China set up shop in other regions that not only encourage crypto mining but also boast of low electricity costs. In the US, Texas has witnessed the influx of Chinese miners more than any other state due to its cheap nuclear energy.
Clean Energy Mining Contributes to Hash Rate Recovery
As miners resume their activities in these regions, they have now resorted to using clean energy sources for mining Bitcoin. In view of this, a report by the Bitcoin Mining Council disclosed that clean energy mining for Bitcoin was now at 56%. The steady recovery in mining hash rate is also attributable to clean energy mining.
While Chinese authorities banned Bitcoin mining, they claimed that carbon pollution from mining companies informed the ban. Moreover, the Chinese government has stated plans to eliminate carbon pollution by 2060. Despite the BMC’s report, it does not seem likely that China would embrace mining again.
In fact, many consider the ban as a step in the right direction to decentralize the mining ecosystem since China used to hold the largest share. Now, the US hash rate is almost at 17%. Canada’s is at 6%. Meanwhile, China’s hash rate has dropped to 46%.
China’s unfavorable disposition towards Bitcoin mining and cryptocurrencies may cost it to lose its economic standing, Mike McGlone predicted in a recent report. As an alternative to cryptocurrencies, China has resorted to a CBDC, a digital Yuan. The Asian giant ended the first pilot program for its Digital Yuan two weeks ago after registering over $5 billion transaction volume during the trial.
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