According to the Cambridge Center for Alternative Finance, China’s hashrate allocated to Bitcoin mining has almost gone to zero.
Hashrate is no longer dependent on China
The map is crystal clear: at the beginning of the year, 53% of the entire global Bitcoin hashrate was allocated in China, down to 49% in March.
Since May there has been a real collapse: 44%, down to 34% in June, and 0% in July.
China is no longer a factor when it comes to Bitcoin mining.
In contrast, the US was only at 10% at the start of the year, but by March had already risen to 16%. In May, it was still only 17%, but from June onwards it boomed: first 22%, then 35% in July.
The distribution of the Bitcoin hashrate
The percentage of computing power globally distributed in the US more than doubled between May and July, and at 35.4%, the US is now the single country in the world with the most hashrate allocated to Bitcoin mining.
Interestingly, in second place is Kazakhstan with 18%, not coincidentally a country with a large supply of cheap energy and close to China.
Many Chinese miners have moved abroad, and the Central Asian states have been an absolute favourite destination for miners fleeing China, both because of their low energy costs and relative proximity.
Russia and Canada are also now at the top end of this ranking, with 11% and 9.5% respectively.
The only other countries in the world with more than 1% of the hashrate are Ireland (4.7%), Malaysia (4.6%), Germany (4.5%) and Iran (3%).
The most noticeable increase is in the US, since only a year ago it was just over 4%, suggesting that the bulk of the hashrate lost in China this year has been replaced by hashrate installed in the US.
It is unclear whether this was a case of Chinese miners relocating their operations to the US, or a new market opportunity that US entrepreneurs were able to exploit better than others.
In the latter case, it would be a real takeover by the US against China as the leading country in Bitcoin mining, i.e. in the validation of on-chain transactions. This could indeed be a momentous event for Bitcoin.
Going back as far as September 2019, the percentage of hashrate allocated in China was as high as 75%. Until a couple of years ago, Chinese miners completely dominated this market, without rival. State decisions against Bitcoin mining due to its high energy consumption have effectively excluded China from this market completely.
China is suffering from serious energy supply problems this year, and it is doubtful that it would make the decision to re-enter in the future, should they manage to solve these problems.
However, the feeling is that the die is cast: the Asian country may have lost its overall lead in Bitcoin mining.