China increases domination of Bitcoin mining
New research rebuts climate criticism
Chinese crypto miners now control two-thirds of the Bitcoin network’s global processing power, according to new research .
Digital asset manager CoinShares has analysed the national share of the ‘hashrate’, a measure of the power of computers linked to the bitcoin network that determines their ability to produce new coins.
Crypto mining requires significant amounts of computing power to solve mathematical equations and thus earn new coins. The higher the hashrate the more power is needed to produce bitcoin.
China’s hashrate share has increased from 60 per cent in June to a current now stand at 66 per cent, according to Coinshares
The emerging global superpower has a conflicted relationship with cryptocurrencies. In 2017 the People’s Bank of China (PBoC), concerned with the emergence of a decentralised alternative means of exchange, announced a blanket ban on the trading and possession of all cryptos.
In the seven months preceding the ban, 65 initial coin offering (ICO) projects were launched in China raising an estimated ¥2.6bn ($370m, £280m). Following the announcement, China's two largest exchanges OKCoin and Huobi were forced to relocate to America and Singapore respectively.
Although Chinese president Xi Jinping described cryptocurrencies as “financial fraud” as recently as last month, China has become the world’s leading crypto miner. As hostile as the Communist Party of China CCP is to the technology being used within China it has allowed the mining industry to flourish and recently rowed back on its inclination to ban it.
The bitcoin network now consumes more energy than the likes of Switzerland, Austria and the Czech Republic. Last month Digicominist stated that the leading crypto’s network has a carbon footprint on par with Denmark.
However, the latest report from CoinShares, which manages around $600m (£456m, €539m) in digital assets, would disagree with the recent climate alarmism surrounding cryptocurrencies. It estimated that around 73 per cent of the electricity used by the world’s Bitcoin miners is actually renewable.
The green credentials of the major Chinese miners may be debated, but the dominance of China cannot be contested. Sichuan province alone now accounts for 54 per cent of the global bitcoin hash rate.
FURTHER READING: Huobi joins blockchain alliance led by the Chinese government
FURTHER READING: Chinese president labels cryptocurrencies ‘financial fraud’