China is the most important epicenter of Bitcoin mining industry in the world. However, their dominance in this area seems to be waning. At the same time, nations like the United States and Kazakhstan are rebounding.
However, China’s hash rate power could be affected by a number of factors. This is expressed in the fall in electricity consumption in the mining industry in recent weeks.
According to the recent analysis of TokenInsight analysis, the decrease in mining electricity consumption has been significant. It would be a 10% drop. This fact could be considered positive for the purposes of further decentralisation of bitcoin extraction.
The Bitcoin mining industry is not the same after Halving
Halving, for many, is the most important factor in the loss of China’s concentrated power in mining. The distribution of the most powerful equipment is easier outwards than within the Asian country.
This means that, while in China there are consolidated and stable farms, which use obsolete equipment. In countries like the United States, the industry is just beginning to take off and is establishing itself with the latest equipment. Additionally, the cost of electricity in China is very low, especially in winter, which does not make the renewal of ASICs urgent.
After Halving, on May 11, Bitcoin’s mining industry suffered a cutback in rewards. The impact, although widespread, has been particularly strong in China. This is because of the amount of old mining equipment that is still active. Many farms have proceeded to disconnect them, which has an impact on the loss of hash rate in the country.
Bitcoin Mining under attack in Yunnan
Cost of electricity and state pressure
Pressure from Beijing against the Bitcoin Storm mining industry has decreased since it was announced that there were no more short-term plans to outlaw it. However, the siege episodes have not completely disappeared, which keeps farm owners worried.
Recently, in Yunnan Province, local authorities ordered the dismantling of 57 mining projects. The reasons for this were an allegedly unregulated installation of the same. Similarly, the local government is trying to link the explosion at a hydroelectric plant to illegal mining actions.
Close to Yunnan is the province of Sichuan, another major focus of virtual mining. Between the two provinces lies much of the country’s mining power. There, the low costs of energy in the winter season are remarkable.
Despite this, some analysts believe that there is no point in having advantages in terms of electricity, if the profits must be used to cover debts. But it is not only about debts, but also about pressure from the authorities in some regions such as Yunnan.
China’s hash rate in the Bitcoin mining industry is declining, while interest in the U.S. is rising.
Bitcoin: The Great Decoupling of the Economy
In search of new horizons
This whole complex web of events in China has caused the Bitcoin mining industry to look for more comfortable places. This is expressed in the drop in electricity consumption from 75.63% in September 2019, to 65.08% last April, according to TokenInsight.
At the same time, in the United States, where the industry is becoming increasingly attractive to investors, the relationship is reversed. In the same period of time, the increase in consumption in the sector increased from 4.06% to 7.24%, which represents an increase of 78.33%.
According to the Cambirdge Center for Alternative Finance, China’s dominance in mining remains overwhelming. But, there is already a decentralizing trend. As shipments of the new generation equipment begin to massify, China’s loss of dominance will expand.