Bitcoin Miners Flee China As Hashrate Dominance Fades
China’s mining dominance is slowly fading as Bitcoin miners look for more stability and cheaper energy costs. Added with firms in western locations snapping up the best mining devices, China is slowly losing its grip on the Bitcoin hashrate.
Many Chinese miners had to switch off their machines in October as the wet season lasted longer than usual. This led to more expensive energy prices, and caused the Bitcoin hashrate to plummet over 45%.
The non-availability of cheap energy at certain times of the year in China is a real concern for the Bitcoin miners who struggle to get cheap energy suppliers.
This led many Chinese Bitcoin miners to head to western China for cheaper energy costs, but it’s also leading to more large mining firms opting to set up in Europe and the US.
Solo Chinese Bitcoin Miners Can’t Make It Pay
China dominates the Bitcoin hashrate as there is still 65% of the entire mining hashrate from there, but it is slowly losing its grip.
Many small-scale Chinese Bitcoin miners are losing out because of the ever-increasing energy costs there, and they struggle to get hold of the best Bitcoin miners.
Running the older S9 machines makes it even more difficult for them to make a profit.
Added with the Bitcoin Difficulty Adjustment making it more expensive to mine BTC, and the average solo miner simply can’t make it pay to mine in China.
Cypherpunk Jameson Lopp Believes China’s Dominance Will Fade
Famed Bitcoiner, Jameson Lopp believes China’s mining dominance is unlikely to last. The Cypherpunk believes more mining chip producers will begin to set up outside China, as they also search for cheaper energy suppliers.
Lopp argues that although there are many jurisdictions with cheaper energy, most are incapable or of supporting large scale mining production due to differing circumstances.
Lopp expects this to change, however, and a shift away from China will see more hashrate move away.
‘Over the very long term I expect we will see semiconducter foundries outside of Asia begin producing more mining chips,’ said Lopp. ‘Countries with even cheaper power sources will continue to become more industrialized, thus providing more competition when miners are seeking out new locations to set up shop. China’s mining dominance is unlikely to last.’
Europe Is Nibbling Away At China’s Bitcoin Hahsrate
In recent news, Anglo-Russian London LSE-listed company EN+ just announced it is getting into the Bitcoin mining industry after partnering with Bitcoin mining firm BitRiver.
EN+ owns the world’s largest independent hydropower generator, and the mining venture will see EN+ provide BitRiver’s mining facility with low carbon and cheaper energy costs.
The venture is already up and running, but both companies plan to increase the facility’s capacity to approximately 40MW.
En+ has enormous power capacity and the company plans to grow its Bitcoin mining facility in the future, and could emerge as one of the biggest Bitcoin miners.
And with the cheaper energy costs that Russia offers, we’re likely to see the LSE-listed company expand their mining capabilities.
The US Is Eating Away AT China’s Mining Dominance
The US is probably eating the biggest slice of China’s Bitcoin hashrate dominance as many large mining firms look to set up in favourable western locations.
Last month, BitcoinMaximalist reported on US mining firm Marathon Patent Group had purchased over 23,000 Antminer S19 Pros, the best Bitcoin miners on the market.
Once Marathon has all the mining devices running it will give the Nasdaq-listed mining company a total hashrate of 2.56 EH/s, making it the largest Bitcoin miner in North America.
This news comes just after the mining firm agreed a joint venture with energy supplier Beowulf in an effort to gain cheaper energy costs.
Bitcoin mining manufacturer MicroBT is clearly aware of the growing demand outside of China, and they recently launched a Bitcoin mining manufacturing plant in Malaysia.
It’s the first time MicroBT has moved production out China, as it attempts to get around the expensive tariffs the US has placed on Chinese goods.
The new production plant will be mainly for US investors, who would save a whopping 25% than if they bought from China.
China Is Still The Dominant Bitcoin Miner, But Things Are Changing
China has long dominated the Bitcoin hahsrate. It produces nearly every mining device, and has cheap energy costs. Win win for Bitcoin miners there.
However, miners are moving out of China and its hashrate dominance is fading. At 65% of the Bitcoin hashrate China is still almost double the rest of the world, however.
It’s difficult to know what will happen under President Biden, and we might expect the tariffs Trump placed on Chinese goods to be removed.
This will benefit the Chinese economy and Bitcoin miners, but will likely slow down China’s weakening dominance.
However, as more companies set up production facilities elsewhere, and other nations offer cheaper energy costs and more stable environments to do business, Bitcoin mining firms will move.
Author: Tommy Limpitlaw
How long does it take to mine 1 Bitcoin?
On average, it takes miners 10 minutes to mine BTC. But they don’t just mine 1 BTC. Mined Bitcoins are created with every new block and these produce the Bitcoin block reward which at the moment is 6.25 BTC, so you could say it takes less than 2 minutes to mine each Bitcoin.
How much does it cost to mine 1 Bitcoin?
There is no exact science for the cost of mining a bitcoin, because the price will change every two weeks maximum. This is because there’s a Difficulty Adjustment that ensures it takes about 10 minutes to mine a block. And with other costs, such as your mining equipment, electricity, and other costs, it’s estimated that the average price to mine a bitcoin is around $12,500.
How can I earn free Bitcoin?
Nothing is really free, because even when you earn free Bitcoins you’re giving up your time, which is precious. But you can earn free Bitcoins. If you are a gamer, there are games like Bitcoin Bounty Hunt where you shoot your way to Bitcoin riches. Or there’s Carrot – a platform where you can earn free Bitcoin for doing tasks. Or you can save your Bitcoin in an interest bearing account and earn some Bitcoin interest. Be careful with interest bearing accounts, and only go with legitimate companies, though. I recommend Blockfi, you can read the review here.
Can you buy less than 1 Bitcoin?
Yes. Every Bitcoin can broken down into 100 million bits. They are known as satoshis, after the pseudonymous creator Satoshi Nakamoto. And some companies will let you buy as little as $1 worth of Bitcoin, which at time of writing is worth about 11,000 satoshis. There are many companies that have a system for dollar cost averaging (DCA). This is a great way to buy Bitcoin, and is known in the space as ‘Stacking Sats’. Basically, what you do is set up small automatic, recurring payments to buy Bitcoin (or sats), and you DCA over time.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.