BREAKING NEWS: According to the smart individuals at the Cambridge Centre For Alternative Finance who work hard to publish the Cambridge Bitcoin Electricity Consumption Index (CBECI) from the United Kingdom’s University of Cambridge, as of October 2021, the USA is now the world’s #1 Bitcoin Mining Country with an estimated 35.4% of the overall Bitcoin Network Hash Rate. Meanwhile, not so surprisingly, China is reporting a 0% share of Bitcoin Network Hash Rate for the 1st time ever. But, is there more to the data than meets the eye?
Certainly, Bitcoin Miners worldwide understand that true decentralization is only sustainable and achievable if a majority of the Bitcoin Network’s Hash Rate is distributed amongst many different parties rather than held by 1 or 2 dominant forces. While Bitcoin Mining and Bitcoin may be topics you hear about quite often these days, and while you may know that some things have recently happened in China that impact Bitcoin, and while you may or may not know how to start mining bitcoin, how to store your bitcoin, or how to buy the best bitcoin mining machines, you can trust that more people are navigating the waters of the bitcoin world daily in their quest to become the next bitcoin whale. As you will see from some recent data, there are some locations- like the USA, for example- that have more people mining bitcoin in October 2021 than ever before.
While things are exciting today, Bitcoin Mining is poised to get much more exciting by the day. Given the current state of the bitcoin mining industry, it also seems likely that hash rates and the distribution of mining activity amongst locations will continue to evolve.
Since bitcoin is for everyone, it is great to see more and more people join the world of bitcoin mining AND it truly makes sense to think that bitcoin should be mined anywhere and everywhere it’s possible to do so. Frankly, in the interests of decentralization and security for bitcoin, the more bitcoin miners there are in the world- the better.
After all, when things are done properly, one thing that Bitcoin advocates love about BTC is that Bitcoin’s Network is extremely secure and nearly impossible to attack or spoof- unless 1 bad actor somehow could obtain 51% or more of the overall mining hash rate.
While it’s very unlikely in the present times to think any single party could possibly obtain 51% or more of Bitcoin’s Hash Rate in order to cause harm, there are some people who have always felt a bit of concern when seeing one location dominate the world of bitcoin mining. In fact, even at the start of 2021, more than 50% of bitcoin mining was thought to take place in China while the United States was thought to have a share of around 10.5% as of January 2021.
While University of Cambridge’s data is primarily linked to energy consumption figures, it still helps to show the overall state of the bitcoin mining industry as well. For those with a specific focus on the energy demands of mining bitcoin, it will certainly be an interesting activity to watch how the energy grids of the USA and other locations respond as the Bitcoin Mining activities increase in respective countries that are taking on additional bitcoin mining power consumption needs while growing their hash rate share.
How Did The USA Become The World’s #1 Bitcoin Mining Country In 2021?
While The USA has always had Bitcoin Mining activity taking place, and it’s thought very likely that Satoshi Nakamoto himself was/is based in USA, several momentous events have taken place in 2021 which have helped to accelerate the United States of America’s share of the Bitcoin Network Hash Rate to a record 35.4% (and climbing) as of October 2021.
First off, China’s banning of Bitcoin Mining and the great Chinese Bitcoin Miner Exodus of 2021 are certainly factors which contribute greatly to the drastic recent change in bitcoin mining hash rate distribution amongst countries. For some bitcoin miners, the threat of punishment from their home country’s ruling class is something intolerable and a reason in itself to step away from mining bitcoin. While many Chinese Bitcoin Miners did choose to liquidate their Bitcoin holdings and shut down mining operations, many others chose to move their mining machines to locations like USA, Kazakhstan, and Russia, among others.
Second, another way the USA has become the world’s #1 Bitcoin Mining Country is simply increased interest and adoption of Bitcoin from the general public. More people hear about bitcoin and decide they want to buy some ASIC Bitcoin Mining Machines to try mining bitcoin. When more people start mining, especially with newer and more powerful mining machines like the Bitmain Antminer S19j Pro, then hash rate increases AND power consumption also increases.
Third, many bitcoin miners from around the world use bitcoin miner hosting/colocation services like Core Scientific, Blockstream, and MinedPool Technologies, to host their mining machines. Coincidentally, most large bitcoin miner hosting providers are currently located in The USA. Therefore, many miners from around the world are represented in the USA’s share of hash rate because their machines are ran in the USA and depend upon USA energy…but, again, there is a bit more to the data than meets the eye. For example, while 35.4% of the Bitcoin Network’s Hash Rate may be traceable to the USA’s energy- it is 100% guaranteed that a large share of the USA’s Hash Rate is owned by individuals from both the USA and many different locations around the world.
Does China Really Have No Bitcoin Mining Activity, And Is China Having A 0% Share Of Bitcoin Network Hash Rate Really Accurate?
Long story short, we’re not sure what the true state of bitcoin mining is right now in China and only those within the country can really speak the truth.
Given the acknowledgement from Cambridge that VPN or proxy services can have a significant impact on the reported location of a device, it is possible to theorize that some covert/”underground” bitcoin mining could still be taking place in China with the miners using VPNs to obfuscate their real locations while reporting locations as being in places like Ireland, Germany, and Kazakhstan, but no suspicions have been confirmed or substantiated by credible reports so far.
While many bitcoin miners and analysts worldwide agree there has been a gigantic reduction in the amount of bitcoin mining activity taking place in China, many skeptics surveyed still find it hard to believe there is truly zero bitcoin mining happening in China as of October 2021. However, given China’s recent hard stance taken towards bitcoin and cryptocurrency activity, nobody really finds it hard to believe that there is zero reported bitcoin mining taking place in China as of October 2021. While most of the large bitcoin mining operations have either moved to another location or have shut down operations, there is certainly a chance there are some bitcoin miners who still are operating in China, albeit with a much more covert state of operating.
However, based on the available data, it is plausible that China’s Share Of Bitcoin’s Overall Network Hash Rate could now be zero.
Where Is The Future Of Bitcoin Mining Hash Rate Going Next?
Truthfully, nobody knows exactly what the future holds and the future of bitcoin mining is equally as unclear as the future of any other subject. The USA could continue to grow hash rate, or somewhere else could step up to become the newest contender for the throne. Most importantly, if you’re not already, hopefully you will start mining bitcoin yourself to ensure you can help secure and positively impact bitcoin.
As is clear from University of Cambridge’s assessment of the Bitcoin Network’s Hash Rate Distribution By Country, many places are benefiting from China’s remarkable drop-off in bitcoin mining activity. Not only has the USA become the world’s #1 Bitcoin Mining Country, but other places like Kazakhstan, Canada, Russian Federation, and others, have all had sharp increases in bitcoin mining activity in the waning months of 2021 in the wake of China’s recent move to ban bitcoin mining for good.
Watching the bitcoin mining hash rate evolution can be a fun thing. What’s even funner? Making your own impact in the world of bitcoin mining! Remember: no matter where you are, it’s always possible for you to enjoy mining Bitcoin like a pro!
As always, thanks for reading, and remember: the MinedPool Technologies blog is always the best place to find the latest in bitcoin news.