Things were not optimistic for Bitcoin (BTC) mining even before the Chinese authorities stepped up their crackdown on this sector in May.
Recent research by the Cambridge Center for Alternative Finance (CCAF) indicates that China’s share of mining fell from 75.5% in September 2019 to 46% in April 2021.
As a result, BTC mining has become more geographically distributed, as recognized by Documenting Bitcoin. The cryptanalytic firm explained:
“Bitcoin mining is being distributed more geographically: China now has less than 50% of the total hash rate, with the United States being the largest beneficiary. Like the open Internet, a wealth transfer from East to West. “
Thus, the United States has become the biggest beneficiary and the BTC mining sector appears to be shifting from East to West.
These sentiments were echoed in the CCAF study, which revealed that the share of hashrate in the US soared to 16.8% from just over 4%. Kazakhstan, Russia and Iran were the other beneficiaries.
The hashrate is used to measure the processing power of the BTC network. Thus, it enables computers to process and resolve problems that would allow transactions to be approved and confirmed across the entire network.
Bitcoin hashrate fell 52.5% after Chinese ban
According to on-chain metric provider CryptoCompare:
“Following China’s ban, BTC’s hash rate fell 52.5%, from 181.61 million TH / s on May 13 to 86.19 million TH / s on July 2. These levels have not been seen since 2019 when the hash rate averaged 90.45 million TH / s. “
On July 14, Anhui, a province in eastern China, became the latest region to shut down all crypto mining activities, citing an acute power shortage.
Some crypto analysts had previously recognized that BTC mining could become more profitable and more accessible after China’s ban and it appears that the United States will reap huge benefits from this development.
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