Bitcoin's 'Great Mining Migration' Has Survived China's Massive Crypto Crackdown
The Bitcoin hashrate, which measures the global computing power of Bitcoin mining, has almost recovered to the level it was at back in May, prior to China's government crackdown on the industry, a report from CoinDesk reveals.
Amid the increasing global attention for cryptocurrencies, China banned Bitcoin mining in May and prohibited financial institutions from enabling crypto transactions. This came shortly after India also announced it would ban ownership, trading, and mining of the digital currency.
China was the global leader for Bitcoin mining at the time as it accounted for 71 percent of the hashrate worldwide. According to mining pool BTC.com, the global hashrate roughly halved between May and June, as Chinese miners ceased operations.
According to reports in June, China's crackdown led to a "great mining migration" to neighboring countries such as Kazhakstan. Now, according to new reports, hashrates are already at their pre-May levels thanks to massive new operations in North America as well as the emigration of miners from China.
The Bitcoin hashrate may soon 'hit an all-time high'
According to BTC.com, the hashrate over the past three days has averaged 182.83 exahashes per second, which is close to the peak in May of 190.55 EH/s. Eddie Wang, a senior researcher at OKLink, told CoinDesk that the rates are soon likely to rise above those pre-May levels. "It definitely looks like the hashrate will hit an all-time high before the new year," Wang said. "Unless we get another brutal bitcoin sell-off shortly after the next difficulty adjustment."
This is both a good thing and a bad thing, depending on where you lie. Many big names, such as SpaceX and Tesla CEO Elon Musk have championed the use of cryptocurrencies in recent months as a decentralized means of making transactions. Tesla, in fact, made a $1.5 billion investment in Bitcoin in February this year, leading to a surge in global crypto investments. However, the EV automaker later performed a u-turn on its decision to allow cryptocurrency transactions, citing the industry's impact on the environment.
That's largely down to an analysis by the University of Cambridge, earlier this year, showing that Bitcoin consumes more electricity than entire countries, including Argentina, the Netherlands, and the United Arab Emirates.