Chinese Bitcoin mining dominance waning says study
New study finds decline in electricity usage among Chinese Bitcoin miners
China’s domination of the Bitcoin mining sector has waned in recent months, according to a new study by Cambridge University’s Centre for Alternative Finance.
First picked up on by crypto analytics firm TokenInsight, the study found that China’s share of the overall Bitcoin mining sector’s electricity usage fell from an estimated 75.6 per cent in September 2019, to 65 per cent at the end of April.
Although China remains the foremost nation when it comes to mining the world’s most popular cryptocurrency, other nations have picked up the pace. Kazakhstan’s mining industry has seemingly experienced a boom, with its share of the crypto hash rate jumping from 1.4 per cent in September to 6.1 per cent in May.
China’s largest trading, the United States of America, also witnessed a rise in activity, with its estimated share rising from 4 per cent to 7.2 per cent in the eight month time frame studied by Cambridge.
One could doubt the utility of the study as its findings were based on educated estimates, however, it does nonetheless conform with a growing trend in the Bitcoin mining world.
Although the nation has dominated Bitcoin mining for some time and continues to dominate, the fact that it got to the punch early is beginning to count against it. Many of the machines used by Chinese miners are fast becoming out of date and the recent Bitcoin halving has done nothing to ease the pressure put on them.
For such a revolutionary and innovative technology, Bitcoin mining in China is nonetheless affected by the changing seasons. With the rainy season just beginning, miners in northern China have begun the migration southwards to provinces such as Sichuan where hydroelectric power is cheap.
Although this abundance of cheap electricity momentarily accelerates BTC mining, it disincentivises investment in new machines, proving to be a momentary fix.
With the Chinese government becoming less hostile to BTC mining there are glimmers of hope for a revitalisation of the sector in the world’s second-largest economy. The recent update to the Chinese civil code, which approved the inheritance of Bitcoin and Ethereum in the event of a citizen’s death, has also provided a glimmer of hope that the government’s attitude could soften further.
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