China is the leading country in terms of Bitcoin mining hash rate. The percentage of the total hash rate was above 50% for years. This is something that is changing.
The second largest economy in the world has carried a love/hate relationship with cryptocurrency. For a while, it was very open to Bitcoin mining, since it brought in so much revenue. However, there is a push of late by China to separate itself from cryptocurrency of today.
Much of this is due to the fact the country is experimenting with its own digital currency. This means that it wants to eradicate the others if it can.
Source
Miners in China have started to feel the pinch as the government started to increase it dislike for crypto. It banned exchanges which make it tough for miners to turn their rewards into local currency, a move that is needed to pay the electrical bills.
This is another cause for concern. China is experiencing a coal shortage which is causing unreliability to the electrical grid in many areas. This obviously hinders their ability to reap the benefits of mining, since reliable energy is required.
All of this is resulting in an exodus from the country. The net recipient of this move is the Nordic countries. Many believe the shift in mining hashrate, geographically, is a story that few are looking at. Nevertheless, it is a big deal.
One of the big steps in Bitcoin's transition is the fact that mining is becoming more open. It is now a viable path to follow. Many miners are finding their company's stock onto public exchanges. This is only furthering the acceptance of the financial community.
We also see the shift breaking up the Chinese monopoly. While they are still far ahead of everyone else, the fact that it is believed the hashrate dropped below 50% is viewed as a big step. Bitcoin prides itself on decentralization and the fact that hashrate is spreading out geographically only feeds into this.
At the same time, the energy in the Nordic countries is not only less expensive than in many areas of China but also comes from renewables. We also can add in the fact that it is a cold environment, allowing mining machines to require less cooling.
Here is an example of how the global nature of Bitcoin causes a shift when a country's policy is non-conducive. People will simply pick up and move to a country that is more accommodating to what the company's need.
In the past, I pointed out how the United States is rapidly falling behind in the crypto game due to its onerous approach towards cryptocurrency. Whereas the country could ascend to the global leader, further cementing itself as the big banana, it rather try and protect the old system.
Ultimately, the winner out of all this will be those countries that have the foresight to realize that this is the path to global competitiveness.
For the moment, China appears to be lacking in this vision also.
The miners are opting out of the Communist system, at least with their mining rigs. Those are ending up in the snow banks of the Nordic region.
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Its funny to me that the tariffs on Austrialian Coal imports is having such a big impact on BTC mining.
Funny how so many things are tied together.
Isn't this the truth?
That is why those who try to look at economic matter as a stimulus/response situation are often wrong. Economies are multi-faceted with many different variables. Yet, especially those in the West, want the headlines. For example, flip on CNBC and they will tell you the stock market dropped because Oil was down and you look at a 6 month chart to find their was no correlation. Yet on that day there was?
This is how people think and why the masses are usually wrong. They fail to look at the entire, holistic picture.
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The government will use the " it is injurious to the environment " motto to achieve their end goal .
I personally think it will impact positively to BTC .
the reduction in mining in China is positive because it allows greater decentralization and therefore greater network security.
I'm sorry for the farms that have invested wagons of money for the purchased hardware
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I would presume they just box them up and move them to another location.
But you are right, the decentralization is a good thing.
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That's not an unexpected move by China to be more strict on BTC mining now that they are developing their own digital yuan. Like you say, if they made it open and it brought in revenue to the country then they could be the winners but something tells me it goes against their political beliefs to have an open to all currency operating in their country...
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When you refer to the Nordic countries do you mean the Scandinavian Peninsula?
If so, that's fine, as far as I can tell. As far away from communist totalitarianism.
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Yes
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bitcoin - everyone can plug in a machine - it will free us from bankers
billionaires - we'll just plug in more machines than you
i think satoshi's vision went in the crapper
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I have heard many facets of things about the drop in BTC mining in China but most common one is that they are diversifying. The required mining to earn 1 BTC has rose over the years and many miners in China are aiming for best ROI. Even with the drop in BTC mining they are ahead of the competition which goes to show how much they have put forth on mining BTC even before it broke out in price this year. Thanks!
This is funny because I believe China is a big country and BTC mining takes that much electricity which is the reason for this shortage. As far as I know then wherever electricity prices are cheap then mining should be more portable there.
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An extra perk of moving towards the north is it's colder there. That will also factor into savings. Chinese government is actually blessing cryptosphere with more decentralization. It is also making Proof of Stake more attractive to a many users. One reason I made STEEM into my biggest crypto investment during the bull market was the passive income I could be making with it.
Even though I lost in dollar value, I now own many STEEM, HIVE, BLURT because of it.
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