As Ki Young Ju points out, bitcoin mining activity is moving to the United States, although Chinese miners still dominate. In a post on x, Ju, the founder of CryptoQuant, a cryptocurrency analytics platform, x.com/ki_young_ju/status/1838140712736711110″ target=”_blank” rel=”noopener nofollow”>observe that more and more US mining pools are gaining market share against their Chinese counterparts, based on bitcoin's hash rate dominance.
bitcoin hash rate moves to the US after China ban
As of September 23, Chinese bitcoin mining pools controlled 55% of all bitcoin hash rates. At the same time, those operating from within the United States control 40% of the total. This means that the two countries dominate all bitcoin mining activities, controlling 95% of all hash rates, posing a huge risk to the operation and security of the blockchain.
bitcoin is secured by distributed, decentralized miners who often channel their computing power (hash rate) into a pool for a chance to earn block rewards. These miners have to purchase equipment and cover all operational costs.
IHowever, as an incentive, the network distributes 3,125 btc and the associated block fees approximately every 10 minutes to the successful mining pool or miner. In this way, the network remains secure and, in theory, equally decentralized.
As the trends show, the shift in hash rate dominance coincides with the crackdown on cryptocurrency mining activity in China in May 2021. Citing various concerns, the Chinese government banned all forms of cryptocurrency mining and staking.
Specifically, they claimed that the proliferation of cryptocurrencies made it difficult for them to curb financial crimes and stem capital flight. At the same time, the Chinese government claimed that cryptocurrencies and bitcoin would destabilise the economy.
Following this, most Chinese miners were forced to shut down their operations and relocate to other regions. The majority settled in the United States and Kazakhstan. Although there are still pockets of mining activity in China, the pro-crypto stance and favorable regulations mean that cryptocurrency mining in the United States is booming.
Politics friendly: Donald Trump shows support for cryptocurrency mining
It is worth noting that bitcoin mining activity in the United States is institutionalized. Some of the major public cryptocurrency mining companies that mine thousands of btc per year include Marathon Digital and Riot Platforms.
Meanwhile, more independent miners are connecting to US-based mining pools. According to Memory spaceFoundry USA is the largest mining pool, contributing over 30% of the hash rate.
In June, Donald Trump, the Republican presidential candidate, bitcoin-mining-mar-a-lago” target=”_blank” rel=”noopener nofollow”>I met with cryptocurrency mining executives in Florida. During the private meeting, Trump reportedly said that his administration, if elected, would ensure fair treatment for the sector.
Featured image from Canva, chart from TradingView