Bitcoin’s hash rate is migrating from China to the US and Kazakhstan. Research shows that China’s share of Bitcoin mining has decayed 29%.
The research team from the Cambridge Center for Alternative Finance (CCAF) revealed new data that shows the geographical changes that Bitcoin mining has been suffering during the year. The analysis highlights that China’s share dropped dramatically long before the government crackdown in June 2021.
New data from the CCAF at Cambridge Judge Business School revealed that China’s share of Bitcoin mining had fallen from 75.5% in September 2019 to just 46% in April 2021, even before the set of restrictions to bitcoin miners appeared. In contrast, during the same period, the United States’ share of the total Bitcoin hash rate reached a peak circling from 4.1% to 16.8%.
The report also highlights the increase in mining participation in Kazakhstan, which now ranks third place in the list, going from 1.4% to 8.2% in the same time. Russia and Iran are in fourth and fifth position.
In 2019, the Cambridge Bitcoin Electricity Consumption Index (CBECI) platform debuted in a context of growing concern about the sustainability and environmental impact of Bitcoin mining. Since then, a global debate has been created and has received high importance in recent months. This interest started to grow right after the announcements made by the co-founder and CEO of Tesla, Elon Musk.
Under the argument of environmental impact, as of May, the Government of China has limited Bitcoin mining, and in some provinces, it has banned it. The energy provider State Grid has been one of the principal promoters, alleging electricity shortages in some areas of the Asian nation. They have even pointed to risks in Bitcoin as an excuse for the creation of the digital yuan.
Miners Are Getting Out of China and looking for New Places
The analysis also points at the annual migration of miners from the northern province of Xinjiang to southern Sichuan.
This migration happened to take advantage of the low-cost electricity generated by its hydroelectric plant. In 2020, Sichuan’s share of China’s total Bitcoin mining power reached a peak from 14.9% to 61.1% in the rainy season. However, in June 2021, the suspension of Bitcoin mining came to light.
Seasonal migration has seriously harmed the energy profile of Bitcoin mining in China, which has so far been by far the vastest mining market. With recent bans from the Chinese government’s Financial Stability and Development Committee, China’s hash rate has disappeared overnight, suggesting a displacement of miners and their equipment elsewhere.
The increasing participation in nations such as the United States of America indicates where the hash rate will be moving next. Various bitcoin mining companies based in China have made agreements to migrate their equipment to the United States of America and Canada. These deals seem to be reflecting positively on the processing power of Bitcoin miners.
By: Jenson Nuñez
