Bitcoin (BTC) as a cryptocurrency is very reliant on decentralization. BTC miners play an essential role in this decentralization; if they are too centralized, it might jeopardize the network’s security and, as a result, lose its trustworthiness. For a long time, most of the bitcoin hash rate was generated by miners in China. But according to new data, there is a shift happening right now.
Bitcoin (BTC) and China
Bitcoin and China have a tight relationship in that the country is technologically advanced, has cheap energy sources, and is home to the biggest ASIC miner manufacturers in the world. Brands as Canaan and Bitmain produce some of the most efficient bitcoin miners we have seen to this day and they keep developing their line constantly. However, it isn’t these manufacturers that are problematic to some within the crypto sector.
For a long time now, Chinese miners are the biggest hash rate producers in the world. In April 2020 last year, the estimations show that China produced about 65% of the total hash rate, shadowing the 8,5% North America (the second biggest player) produces. Analysts do, however, see a healthy shift these past 12 months.
Chun Wang, one of the founders of mining pool F2Pool, stated on Twitter that for the first time in the eight years that F2Pool is operating, more of the hash rate within the pool came from outside of China:
Here at @f2pool_official, in April 2021, the first month in our 8 years of operation, we have seen more $BTC hashrate coming from outside of China than from the inside. The shifting is real. https://t.co/nf2gBy62re
— Chun @ dogecoin.org (@BocaChicaDoge) May 3, 2021
A shift away from China
The findings of Miner Daily support this shift. They estimate that China’s 65% of the total bitcoin mining hash rate in April 2020 has decreased to about 55% a year later. North America’s share increased to 11%. This shift happened while the total hash rate increased nearly 23% in the same timeframe, suggesting more and more miners are mining bitcoin in other parts of the world.
That more people are mining bitcoin in other parts of the world isn’t too surprising. As more and more clean energy sources such as nuclear, wind, and solar emerge, the energy prices get cheaper. Countries like the United States and Sweden are therefore increasingly more popular. Do you also want to mine crypto in these countries? Read more about our Mining Hosting Service here.
The shift away from China is a positive sign for the state of the network. A more decentralized network is a healthy one, increasing the security and, with that, the trust in Bitcoin.
Will this shift continue in the future? The same platform we mentioned before estimated that there may indeed be a continuation in 2021. If North American wants to take the lead, its miners will have to buy 630.000 ASIC miners, which is unlikely, according to the analysts.
The analysts propose four different scenarios in which the ASIC miners that are being produced are distributed differently. In all four scenarios based on the sales of ASIC miners, North America at least increases its share while China loses in three of the four scenarios. China will, however, likely remain the biggest player in 2021.