Recent research has found that China lost some of the control it had over Bitcoin (BTC) mining, while the United States has gained power. What’s going on?
Does China release the helm of Bitcoin mining?
On July 15, a report was published on Medium entitled Bitcoin Mining Hashrate and Power Analysis by BitOoda, a global digital asset financial technology and services platform, where China is claimed to account for just 50% of Bitcoin’s global mining capacity.
Perhaps when reading that China has 50% of Bitcoin’s mining capacity, one can think: “That is enough!” However, we must bear in mind that this represents a decrease in the power of the country.
In fact, it can be compared to previous findings by the Cambridge University Center for Alternative Finance (CCAF). This investigation established that China had a 65% market share.
New research by BitOoda reveals different information worthy of analysis.
“We were able to locate ~ 4.1GW of power at 153 mining sites, including 67 sites or ~ 3GW power capacity, with energy price data provided on condition of anonymity”, reads the report.
Likewise, the report found that 14% of mining now comes from the United States. This offers an accelerated growth perspective for the country as a Bitcoin mining hub.
While Russia, Kazakhstan and Iran represent 8% each, Canada 7%, Iceland 2% and the rest of the world 3%.
Relationship between flood season and hashrate growth
In this section of the report, the researchers note that the southwestern provinces of Sichuan and Yunnan face significant rainfall during the months of May to October.
These rains are important because they involve large inflows to the dams. Which, as you can imagine, implies an increase in the production of hydroelectric energy during this period.
Therefore, cheap energy begins to be sold, since it is beneficial for both public services and miners (otherwise the dams could overflow).
“In our opinion, the flood season shifts the cost curve downward for 6 months a year,” is explained. Likewise, this reduction in costs implies “Lower Bitcoin Sales to Finance Expenses”.
This in turn implies that miners accumulate capital in order to finance capacity growth.