Recent research has found that China has lost some of the control it had over Bitcoin mining (BTC), while the United States has gained power. What’s going on?
Bitcoin miners reduced shipments to exchanges in the second quarter
Does China let go of the rudder of Bitcoin mining?
On July 15, a report was published in Medium entitled „Bitcoin Mining Hashrate and Power Analysis“ by BitOoda, a global digital asset finance technology and services platform, stating that China represents only 50 percent of Bitcoin’s global mining capacity.
Perhaps when you read that China has 50% of Bitcoin’s mining capacity, you might think, „That’s quite a lot! However, we should keep in mind that this represents a decline in the country’s power.
Graph of the geographical distribution of Bitcoin mining capacity by BitOoda. Mining
Graph of the geographical distribution of Bitcoin mining capacity by BitOoda.
In fact, it can be compared with the previous findings by the Center for Alternative Finance of the University of Cambridge (CCAF). This research established that China had a 65% market share.
The new research carried out by BitOoda reveals different information, worthy of analysis.
„We were able to locate ~ 4.1GW of power at 153 mining sites, including 67 sites or ~ 3GW power capacity, with power price data provided under condition of anonymity,“ the report reads.
The report also found that 14% of mining now comes from the United States. This offers a perspective of the country’s accelerated growth as a Bitcoin mining center.
While Russia, Kazakhstan and Iran account for 8% each, Canada 7%, Iceland 2% and the rest of the world 3%.
What will happen to Chinese mining after Halving Bitcoin?
Relationship between flood season and hashrate growth
In this section of the report, the researchers note that the southwestern provinces of Sichuan and Yunnan face heavy rains during the months of May to October.
These rains are important because they involve large inflows to the dams. As you can imagine, this implies an increase in hydroelectric power production during this period.
Therefore, cheap energy is starting to be sold since it is beneficial for both the public services and the miners (otherwise the dams could overflow).
„In our opinion, the flood season shifts the cost curve downwards for 6 months of the year,“ he explains. Also, this cost reduction implies „lower sales of Bitcoin to finance expenses“.
This in turn implies that miners will accumulate capital in order to finance capacity growth.