The Chinese authorities have banned cryptocurrency mining in at least eight provinces. Chinese Bitcoin mining companies have relocated to the United States and Canada.

Since May 2021, Chinese Bitcoin mining companies have fled to other countries and regions worldwide due to the government’s ban.

This migration process has been moving mining operations to other jurisdictions such as the United States, Canada, and Kazakhstan. That seems to be reflecting positively on the hash rate of Bitcoin miners.

The hash rate has been falling sharply in the last quarter but has resumed bullish momentum, returning to June levels. The hash rate of Bitcoin fell from 148 terahashes per second (TH/s) to 58 TH/s, its lowest point of the year.

The hash rate measure seems to have stabilized, going from 82 TH/s on July 4th to 121 TH/s on July 13th.

More recently, the total hash rate of the Bitcoin network was 115.5 TH/s. Bitinfocharts data indicates that this hash rate was 105.2 TH/s, increasing by 9.41% in 24 hours.

More miners have reconnected to the network in July, contributing their quota to the total hash rate of the Bitcoin network.

The Bitcoin hash rate is the measure of the processing power on a blockchain network. That is the number of hashing operations that miners must perform during a given period to mine a block with transactions.

When a network like Bitcoin reaches a hash rate of 5 TH/s, it can perform up to 5 trillion operations per second. The hash rate expresses the sum of the processing power of each miner connected to the network.

Electricity Consumption of Bitcoin Mining and Hash Rate Fall in China

The migration of miners has caused a decrease in electricity consumption by mining and the hash rate in China. The Cambridge Center for the Financial Alternative (CCAF) conducted a study describing the current situation of Bitcoin mining.

The research indicates that Kazakhstan is now the third country globally where Bitcoin miners consume the most electricity. They have not missed the opportunity to raise the price of the service due to increased demand.

Bitcoin mining consumes a daily average of 8 gigawatts per hour worldwide. If that consumption were stable, it would average 70 terawatts (TW) per year. According to CCAF, the electricity consumption of that activity is above that of Austria (66.8 TW) and Colombia (70.2 TW), among other countries.

China went from consuming an average of 75% in 2019 to 48% in April 2021, losing space compared to other countries.

Electricity consumption is directly related to the hash rate of the miners in that country. For that reason, China is increasingly losing ground in Bitcoin mining.

According to CCAF researchers, some miners still operate in China clandestinely, supplied by private power plants. That makes it difficult to get accurate numbers on the electricity consumption of miners. However, the estimated decrease in this factor is evident in the abovementioned period.

Despite this, it is becoming increasingly apparent that China is closing its doors to Bitcoin miners. The ban in at least eight provinces has made them emigrate to other countries to settle.

By Alexander Salazar

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