The Chinese government is the main reason why China is the world leader in Bitcoin mining. In the past, China’s cheap electricity prices have been a big factor behind the country’s dominance in mining. However, this may soon change as the Chinese government has recently started to crack down on Bitcoin mining. Last year, China started to limit electricity consumption from Bitcoin and other cryptocurrency miners. It also started to shut down miners in certain regions that consume too much electricity.
In a remarkable change of fortune, Europe and the United States could take the lead in bitcoin mining in the next six months, according to Wu Gang, the operator of F2Pool, the world’s second-largest mining pool. Wu said that the U.S. and Europe have both become more competitive thanks to cheap electricity and lower temperatures. “The United States and Europe are more competitive than China,” he said. “In the next six months, the competitiveness of bitcoin mining will shift to countries where electricity is cheap, such as the U.S., Russia, and Europe.” The comments come after a major shake-up in the mining industry. China-based Bit
China is no longer the dominant force in bitcoin mining after the country’s ‘Big Three’ mining pools lost significant hashrate to international competitors. The development means that the global distribution of hashrate, as reported on blockchain.info, is now more diverse than ever before. Today, the Asia-Pacific region accounts for just over half of bitcoin’s network hashrate, followed by Europe with 30 percent, North America with 13 percent, and South America with 1 percent.. Read more about bitcoin news today and let us know what you think.Jiang Zhuoer, operator of China’s largest mining hub Lebit Mining, says the country’s recent crackdown on cryptocurrencies is likely to cause miners to move their operations to Europe and the US, as reporter Colin Wu noted. The worst case scenario could be the closure of large mines, and bitcoin mining in China [will] return to the state of 2014-2015. The little miners put a few at home. Average miners will find a house housing dozens of mining machines, while large miners will find a small, isolated hydroelectric plant, Jiang said. A Chinese who operates several mines abroad told me that most Chinese miners thought it was too expensive to build mines abroad, almost 10 times more expensive than in China, but after last night he has received many requests. – Wu Blockchain (@WuBlockchain) May 22, 2021 He also noted that building mining plants abroad used to be considered too expensive for local miners, as the cost could be 10 times higher than in China, but that many have changed their minds following the government’s statements this week. As reported, Chinese authorities issued several anti-cryptocurrency statements earlier this week, leading to at least two significant market declines on the 19th and 21st. May lead. First, three sector bodies under China’s central bank have called for a ban on financial institutions and online payment channels that incorporate cryptocurrencies. The government then also imposed restrictions on bitcoin mining.
Reduction of social risks
According to Jiang, one of the main goals of the new policy is to protect retail investors from the risks associated with trading and mining cryptocurrencies. In other words: Individual mining is allowed and people can bear the profits and losses themselves, but financial capital should not interfere with mining, which would lead to social risks of losses, Jiang said. In other words: The Chinese government wants to protect the public from losses that may result from investments in cryptocurrencies and mining. While this is not a total ban on the industry, at least for now, it could still displace a significant amount of bitcoin mining capacity. Mining in China could shift from large miners to family miners, even if this results in 50% of mining machines not working, this will not be a problem for the bitcoin system. But the main mining pools could be European and American, Jiang concluded. Removing miners in China will dramatically reduce the carbon footprint of bitcoin mining, increase the profitability of all remaining #bitcoin miners, reduce costly Chinese FUD, support progress towards our ESG goals and increase the value of $BTC. We should be so lucky…. https://t.co/78ELDF9sku – Michael Saylor (@michael_saylor) May 21, 2021 Michael Saylor, CEO of MicroStrategy, which has invested several billion dollars in bitcoin in recent months, says the Chinese crackdown is actually very good for bitcoin. Removing miners in China will dramatically reduce the carbon footprint of bitcoin mining, increase the profitability of all remaining bitcoin miners, reduce costly Chinese FUD, support progress towards our ESG goals, and increase the value of BTC. We should be so happy…, he pondered. But judging by the abundance of large red candles on the charts of cryptocurrency prices, the market seems to disagree with Saylor today.
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Out of the top three Bitcoin mining pools in the world, two are based in China. Meanwhile, Europe and the US have only one mining pool each in the top 15. Yet, the third largest mining pool, F2Pool, based in China, is soon to open its servers to the international community, which could shift the balance of power. The change of servers would help F2Pool gain more revenue from the Bitcoin ecosystem as it would increase the pool’s hash rate, which in turn could attract more miners, or computer nodes, to join its mining network.. Read more about new cryptocurrency and let us know what you think.
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