For a long time, the fact that China contributes the majority of Bitcoin’s (BTC) mining power was used as a criticism against BTC. Except that those days are now over. Indeed, the companies that provide the largest share of Bitcoin’s proof-of-work (PoW) consensus are all based in the United States.
A brilliant demonstration of Bitcoin’s adaptability
How many times have Bitcoin detractors claimed that China could control the king of cryptos to the point of “putting it to death” or other nonsense. Unfortunately for them, the ban on Bitcoin mining ordered by the Chinese regime has simply allowed for a large migration and distribution of the mining devices present in the country.
The main beneficiary of this forced exile of bitcoin miners seems to be the United States, according to the latest data from the Cambridge Bitcoin Electricity Consumption Index (CBECI).
Indeed, according to the updated metrics for August 2021, the US would now account for 35.4% of all computing power (hashrate) counted by the CBECI on the Bitcoin network. While China’s hash power has plummeted, the US has increased from 26.2 exahashes per second (EH/s) in June 2021 to 42.7 EH/s in August, a dramatic 65% increase in 2 months.
A great diversification of mining areas
Already, thanks to (the mistake of) China, as it initially demonstrated that Bitcoin could :
- Resist censorship by any country, however powerful, with transactions in BTC not being affected in any way;
- Not disappear at all, and even adapt perfectly, if its main production/validation state became openly hostile to mining;
- But on top of that, the icing on the cake: this authoritarian ban has even allowed a wide geographical diversification of BTC mining.
Indeed, even if the United States now accounts for the largest share of hash power, other countries have benefited from the end of Chinese competition. Kazakhstan in particular has seen its production more than double in two months, rising from 10.6 EH/s in June to 22 EH/s in August, which represents 18.1% of the global power recorded by the CBECI.
On the third and fourth steps of this new podium are Russia and Canada, each of which represents a not insignificant share of the Bitcoin hashrate, with 11.23 and 9.55% of the total power (13.6 and 11.5 EH/s) respectively.
The rest of the world is certainly not done “thanking” China’s despotic decisions, as the recent ban on all other cryptocurrency mining farms will certainly improve the decentralization of their PoW process. Indeed, a quarter of the Ethereum (ETH) network hashrate is condemned to exile, with the forced closure of 2 major ETH mining pools, Sparkpool and Bepool.