China Dominates the Bitcoin Mining Market
A new report shows that China currently controls some 65% of the Bitcoin mining activity around the world. This leads us to a debate over whether such a high level of dominance is a good or bad thing. There are also doubts over whether new regulations will lower mining levels here in the near future.
The Full Details
These figures come from the Bitcoin Mining Network paper released by digital asset firm CoinShares. The details show that the most influential region is the Sichuan province. 54% of BTC’s global hashrate comes from here.
Much of the other 35% of mining activity is split across a variety of countries such as Russia, the US and Kazakhstan. The 65% noted in China means that this Asian country is at its highest-ever level of dominance. In June of this year, it produced 60% of the hash rate. Overall, $5.4 billion in revenue was produced by miners in 2019.
Why Is This the Case?
China has traditionally been the biggest player on the Bitcoin mining scene. This is because of factors such as low electricity costs and relatively easy access to the latest mining technology.
Some of the biggest companies in this industry are based in China. These include Bitmain, Canaan and F2Pool. In terms of hardware, Bitmain has held onto the top spot but has seen it hashrate fall from 70% to 66%.
However, the report suggests that Chinese dominance should fall to some degree once the latest hardware is more easily obtained in other parts of the world.
What Does the Future of Bitcoin Mining Hold?
The future of Bitcoin mining in China is one of the most interesting subjects in cryptocurrency. It has been reported that the National Development and Reform Commission had put mining on its list of activities to be phased out. However, this story was later denied. President Xi Jinping has also spoken positively about developing the blockchain.
Mining activity will increase in other countries if it is restricted or banned in China. Growth has already been reported in places as diverse as Norway, Georgia, Iceland and Canada. In many cases, the profitability is dependent upon government policies, meaning that it can rise or fall as electricity prices and regulations fluctuate.
One of the hopes for the future is that more mining will be carried out in regions where renewable sources are used to generate electricity. Currently, some of the most popular spots offer cheap power but aren’t known for producing clean, renewable electricity.
This is what brought Norway and Iceland to prominence in the past. Indeed, it was confirmed in 2018 that Iceland became the first country to use more energy on mining than on powering its households.
For investors, it doesn’t matter where the coins are mined. As long as it remains profitable to carry out Bitcoin mining we will see miners carrying out this activity somewhere on the planet.