Updated: December 13, 2021 5:19:05 pm
Bitcoin mining hashrate has now fully recovered to its level in May when China imposed a blanket ban on cryptocurrency trading, mining, and all related activities.
Hashrate is a measure of the computational power required per second when mining cryptocurrency. To put it simply, it is the speed of mining. In the case of Bitcoin, the more mining is going on, the higher the hash rate. It should be noted that when the hash rate is faster, the chances of mining more Bitcoins per second increase.
Interestingly, China accounts for more than 75 per cent of Bitcoin mining, according to research published by the peer-reviewed journal Nature Communications in April. The country went from controlling up to 75 per cent of all Bitcoin mining in the world in April to not contributing to the industry at all as of July 2021, according to data compiled by the University of Cambridge’s Centre for Alternative Finance.
According to Cambridge Bitcoin Electricity Consumption Index (CBECI), China’s global hashrate share was around 34.2 per cent in May of this year. And in 2019, the country accounted for about 75 per cent of the average monthly hashrate share — a significant portion of the world’s Bitcoin mining.
But from May to June 2021, following the increased decline in mining activity in China—the global hashrate saw a steep decline, meaning that the energy required to mine Bitcoin increased, making it even difficult for miners to perform the high amount of calculations that are needed for crypto-coin mining.
However, miners have now set up operations in North America, resulting in the Bitcoin hashrate returning to its May levels. As of Friday, data from BTC.com shows that Bitcoin has since recouped those losses—a promising sign for the network’s durability.
Chinese authorities say cryptocurrencies disrupt economic order and facilitate illegal asset transfers and money laundering. The authorities blame cryptocurrency miners for energy waste to deadly coal mining accidents and a potential threat to the country’s efforts to reduce carbon emission. The country aims to become carbon neutral by 2060.
Earlier, in November, China told its government companies to stop cryptocurrency mining and said it would raise electricity prices for any institution found to be abusing its access to subsidized power to participate in crypto mining.
“The National Development and Reform Commission (NDRC) plans to crack down on industrial-scale Bitcoin mining as well as any involvement by state companies,” Meng Wei, a spokeswoman, said at a press conference. She added that crypto mining and trade comes with “prominent risks,” and attacked the crypto industry, calling it “blind and disorderly.”
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