China was the epicenter of bitcoin (BTC) mining for a long time. Mainly, the abundance of cheap energy and the well-developed technology industry were reasons for mining being such a major sector. But after the Chinese government implemented a blanket ban on mining, things have changed significantly. China is no longer the biggest player.
China’s BTC mining ban
The ban on bitcoin mining in China caused an enormous fall in the Bitcoin hash rate. The hash rate is the computing power that miners in the Bitcoin network generate to process and secure transactions. The higher this rate is, the securer Bitcoin is.
The hash rate dropped precipitously during the first half of this year, causing some panic. Bitcoin had to prove itself as one of the most robust networks in the world. The network’s automatic mechanisms made it easier for existing miners to mine BTC, incentivizing them to start mining. The result should ideally be that the hash rate recovers and the network regains its high level of security.
And indeed, it did just that! The hash rate is now back at the same height as before China’s ban. But maybe more interesting is the shift that has taken place since then. The center of bitcoin mining has shifted from China to the United States.
Bitcoin mining moves to US
Looking at the Cambridge Bitcoin Electricity Consumption Index, we see that the US’ share in the generation of bitcoin computing power was about 15% when China banned mining. On the other hand, China generated about 50% of the total, and this was the absolute market leader in bitcoin mining.
Five months later, and this has completely shifted. The index shows that in August (which is the latest data available), US-based miners generated 35,5% of the total. The shift is even more significant when we zoom out a little further. In September 2019, China still produced 75% of the mining power, and the US only 4%.
These developments show us a couple of things. First and foremost, it shows how resilient Bitcoin is and how serious miners are in maintaining the network. Secondly, it proves that the mobility of bitcoin miners is the strength that makes Bitcoin so resilient. It doesn’t matter if a world superpower is trying to irradicate Bitcoin; Bitcoin simply doesn’t care.
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