China Is Slowly Losing its Grip on Bitcoin Hashrate
Even though a major portion of Bitcoin mining still happens in China, in recent times, there are firm hints of a steady change in the scenario. Chun Wang, co-founder of F2Pool, one of the biggest mining pools, has stated that China accounted for less than 50% of hash rate in April 2020.
Wung has pointed that it was the foremost time the pool had recorded Chinese miners to have a minority share in hash rate in the past eight years of business operation. He further stated that the transition is really happening.
Wang republished the April 22 data posted by Digital Currency Group’s Barry Silbert, disclosing that Foundry, the US based Bitcoin mining pool, had inched upwards to take up a place in the top five large mining pools across the globe in April, garnering a 7.6% share of the hashrate.
Silbert stressed that “Bitcoin hashrate is quickly shifting from China to North America.”
AntPool continues to be the leading pool, operated by China’s mining hardware manufacturing giant Bitmain, with an 18.6% slice of the aggregate hashrate. The University of Cambridge has assessed that the dominance of China in mining was about 65% in April 2020. Citing those figures, Miner Daily, a popular BTC mining related publication, has stated that the hashrate dominance of China has dropped to 55% at the beginning of 2021.
The report, published in January, also stated that the US accounts for 11% of Bitcoin hashing power. China’s cryptocurrency mining operations may come under stringent rules in the future, expediting the shift of mining operations from the country. Of late, Beijing has been tracking the power usage of miners in relation to its own carbon commitments.
In the final leg of February, authorities in China autonomous zone of Inner Mongolia suggested shutting down of all domestic mining facilities to minimize energy usage in the area. Overall, the zone represents nearly 8% of worldwide hashrate.
Marty Bent, host of Bitcoin podcast, has stated that the F2Pool conclusions are an affirmation of a new trend that is developing in the mining domain i.e. realignment of global hash rate distribution. He further stated that this would assist in clearing a portion of the “China controls mining” claims that causes anxiety among investors about a likelihood of severe measures in curtailing the network by Beijing.
Here at @f2pool_official, in April 2021, the first month in our 8 years of operation, we have seen more $BTC hashrate coming from outside of China than from the inside. The shifting is real. https://t.co/nf2gBy62re
— Chun @ dogecoin.org (@BocaChicaDoge) May 3, 2021
“It is great to have some data coming from Chinese pools that proves the percentage of overall hashrate production is being reduced within China’s borders.”
The concerns over power consumption of Bitcoin and impact on environment may also minimize as several mining operations start running on sustainable energy, particularly in the US, where there are stringent rules in place. As per a report published by Nasdaq on May 4, Texas is turning out to be a Mecca for Bitcoin mining farms due to the low energy costs and the fact that a major portion of the energy is generated through wind and solar.
Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.