Bitcoin’s hash rate is migrating from China to the US and Kazakhstan.
Research shows that China’s share of Bitcoin mining dropped 29%.
The Cambridge Center for Alternative Finance (CCAF) research team presented new data that reveals the geographical changes of Bitcoin mining. Analysis shows that China’s share dropped dramatically long before the government crackdown in June 2021.
New data from the CCAF at Cambridge Judge Business School reveals that China’s involvement in Bitcoin mining has decreased from 75.5% in September 2019 to just 46% in April 2021, even before the restrictions were imposed. On the other hand, during the same period, the participation of the United States in the total hash rate of Bitcoin increased from 4.1% to 16.8%.
In the report also highlights the increase in mining participation of Kazakhstan which now occupies third place in the ranking, going from 1.4% to 8.2% in the same period of time. Russia and Iran are right in fourth and fifth position.
In 2019, the Cambridge Bitcoin Electricity Consumption Index (CBECI) platform was launched, in a context of growing concern about the sustainability and environmental impact of Bitcoin mining. Since then, a global debate has been created that has taken on special importance in recent months, especially after the statements of Tesla co-founder and CEO, Elon Musk.
Bitcoin mining map showing the global hash rate percentage from August 2019 to March 2021 showing China in the first place. Source: University of Cambridge / cbeci.org
Under the argument of environmental impact, as of May China’s government has limited Bitcoin mining, and in some provinces it has prohibited it. The energy provider State Grid has been one of the main promoters, alleging electricity shortages in some provinces of the country. They have even pointed to risks in Bitcoin to excuse the creation of the digital yuan.
Miners are moving out of China
The analysis also points out the annual migration of miners and their equipment, from the northern province of Xinjiang south of Sichuan. The above was done with the aim of take advantage of the abundant low-cost electricity generated by its hydroelectric plant. In 2020, Sichuan’s share of China’s total Bitcoin mining power increased from 14.9% to 61.1% in the rainy season. However, in June 2021 a total suspension of Bitcoin mining was ordered.
Seasonal migration has affected the energy profile of Bitcoin mining in China, which until now has been by far the largest mining market. With the recent bans by the Chinese government’s Financial Stability and Development Committee, China’s hash rate has disappeared overnight, suggesting a displacement of miners and their equipment to other locations.
The increase in participation in countries such as the United States and Kazakhstan are an indicator of where the hash rate will be moving next. In CriptoNoticias we recently reported that some Bitcoin mining companies that were in China, have closed agreements to move to the United States and Canada. These deals seem to already be reflecting positively on the processing power of Bitcoin miners.