According to a study released on Thursday by Cambridge University, China’s share of global bitcoin production power dropped sharply prior to the country’s recent crackdown on crypto-month mining.
China has long been an epicentre for global crypto-monetary mining, a time-consuming and energy-efficient process. Many bitcoin miners in China use fossil fuels such as coal, raising concerns about bitcoin’s environmental impact.
Hash Rate fell from 75% to 46%
According to data from the Cambridge Center for Alternative Finance, the country’s share of computer-based power from the global Bitcoin network, known as the “hash rate,” fell from 75% in September 2019 to 46% in April this year.
During the same time period, the United States’ share of hash rate increased from slightly more than 4% to 16.8%, making it the world’s second-largest producer of bitcoin. Kazakhstan’s share has risen to around 8%, with Russia and Iran the other major producers.
The study offers a unique look at global bitcoin mining trends, as companies such as Tesla become increasingly concerned about how the cryptocurrency is produced.
The decline in Chinese mining power occurred before China’s state council or cabinet announced a crackdown on bitcoin mining and trading in late May, citing underlying financial risks.
This week, Anhui became the latest province in eastern China to declare a blanket ban on crypto-monetary mining.
Since then, major Chinese mining hubs such as Sichuan, Inner Mongolia, and Xinjiang have taken all the detailed measures required to root out the company, effectively paralysing the mining industry as miners dump or move their ore to places such as Texas or Kazakhstan.
Bitmain, China’s largest manufacturer of cryptocurrency mining machines, halted sales last month in response to Beijing’s mining ban, and said it was looking for power supplies in countries such as the United States, Russia, and Kazakhstan.
Solution for bitcoin block
The difficulty level in solving the bitcoin block is regulated every two weeks to ensure that the average processing time remains 10 minutes. Based on the amount of computing power that passed over the network during the subsequent China crackdown, the latest modification has reduced the problem to a level last seen in digital currency trading around $9 000 in June 2020.
As a result, the Bitcoin miner who received a block award receives coins worth more than three times what they did last year. “The previous scarcity was blown out of the water,” Voell explained. “It won’t be until the end of the year that all of these ASICs can find space and come back online.” “The situation has worsened five times.”