It’s clear why China has suddenly become so “kind” and open-minded towards bitcoin mining… It now controls approximately two-thirds of the world’s bitcoin and crypto mining power.
China: The Crypto Mining King
According to a new report, bitcoin miners in China control approximately 66 percent of the global hash rate, which is the measure of power that ushers one’s ability to mine and extract new coins. This is a six percent increase from the summer, when China controlled approximately 60 percent of the world’s crypto mining power.
China has had a very mixed relationship with cryptocurrency in the past. At one point, bitcoin was huge in China, and much of the world’s crypto-related action occurred within China’s borders. However, the country showed that it was willing to forgo a lot of crypto business in order to keep people safe. Thus, regulators took measures to ban both initial coin offerings (ICOs) and foreign exchanges in 2017 and 2018 respectively.
From there, the country’s government let the world know it was considering a ban on crypto mining considering the harmful effects on the environment that allegedly stemmed from coin extraction. However, the country later announced that crypto mining was considered legal. In addition, legislators stated a new law was passing that would make it easier for the country to establish a digital form of the yuan, China’s national cryptocurrency.
It looked like the region was opening to bitcoin and the technology behind it, though it could also be said that with companies like Canaan Creative and Bitmain earning billions of dollars in revenue each year, government officials did not want to be cheated out of tax funds from either company.
And we can’t forget the positive blockchain comments issued by President Xi Jinping. Last October, Jinping announced that he would push blockchain innovation in the country, believing that blockchain was a revolutionary technology capable of revamping China’s infrastructure and economy.
One of the reasons for the sudden surge in mining power, according to the report, is that China is purportedly putting out the world’s most advanced mining equipment. Researcher Chris Bendkisen explains that companies like Bitmain and Micro BT are releasing new miners, and that people engaged in extracting new coins are pulling in nearly $5 billion in fees and crypto rewards each year.
How The Country Is Beating Its Neighbors
This is beneficial to the Chinese mining industry. If you are the first to increase your proportion of the hash rate, and you can do that before your competitors, that’s generally good.
What’s interesting about the report is that it clashes with data suggesting interest in bitcoin and crypto may be lagging in China, which is why the price of the world’s leading digital asset is now on the cusp of falling back into the $6,000 range.