As an analyst with over two decades of experience in the tech and finance sectors, I find the shift in Bitcoin hash rate dominance from China to the United States an intriguing development. My life experiences have taught me that technological advancements often lead to significant changes in the global economic landscape, and this transition is no exception.
According to Ki Young Ju’s recent post, there’s a growing trend of Bitcoin mining moving towards the USA, even though Chinese miners continue to hold a significant lead. Notably, more American mining pools are seeing an increase in market share at the expense of their Chinese counterparts, as indicated by the Bitcoin hash rate dominance.
Bitcoin Hashrate Shifting To The US After China Ban
By September 23, Chinese Bitcoin mining pools accounted for approximately 55% of the overall Bitcoin computational power (hash rates). Simultaneously, U.S.-based miners controlled around 40%. In essence, these two nations are the primary players in Bitcoin mining, collectively managing about 95% of the hash rate–a significant factor that could potentially jeopardize the functioning and security of the blockchain.
Bitcoins are protected by a network of dispersed and autonomous miners, who frequently combine their computational resources (processing power) in groups to compete for the opportunity to receive block rewards. To participate, these miners must invest in hardware and cover all expenses related to operation.
Instead, let me rephrase it for you: Every 10 minutes, the network rewards a successful miner or mining pool with approximately 3.125 BTC plus block fees as an encouragement. This keeps the network safe and theoretically maintains its equal decentralization.
It appears that as trends suggest, the change in control over mining hashes (the amount of computational power used to validate transactions on a blockchain) aligns with China’s restrictions on cryptocurrency mining activities, which were enforced in May 2021. The Chinese government cited numerous issues and prohibited all forms of crypto mining and staking.
To put it another way, they mentioned that the widespread use of cryptocurrencies complicates their efforts to prevent financial misconduct and stop illegal transfer of funds. Simultaneously, the Chinese administration expressed concerns that digital currencies like Bitcoin could potentially disrupt their economic stability.
After this, a majority of Chinese miners were compelled to halt their operations and move to different areas. Many ended up in the United States and Kazakhstan. Despite the fact that there are some active mining sites remaining in China, the pro-cryptocurrency attitude and advantageous regulations have led to an explosion of crypto mining in the United States.
Favorable Policy, Donald Trump Vouches Support For Crypto Mining
Significantly, the process of creating Bitcoins, or Bitcoin mining, in the U.S. is predominantly carried out by institutions. Notable companies like Marathon Digital and Riot Blockchain are among the leading public firms that mine thousands of Bitcoins every year.
As additional individual miners affiliate with U.S. mining pools, it’s worth noting that Foundry USA currently leads these pools, accounting for more than 30% of the total computational power (hash rate). This information is provided by Mempool.space.
In June, the Republican presidential candidate, Donald Trump, convened with leaders from the cryptocurrency mining industry in Florida. At this closed-door gathering, Trump expressed his intention, should he be elected, to maintain a fair and balanced approach towards this sector.
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2024-09-24 01:11