According to a new study released on Thursday by the University of Cambridge, China’s proportion of worldwide bitcoin production capacity decreased dramatically even before the Chinese government’s latest ban on digital currency mining. China has long been the hub of Bitcoin mining, an activity consuming a great deal of energy. Many bitcoin miners in China utilize coal and other fossil fuels, raising worries about bitcoin’s environmental impact.
As per statistics from the Cambridge Centre for Alternative Finance, the nation’s share of the power of computers linked to the worldwide bitcoin network, called “hash rate,” decreased to 46 percent in April this year from 75.5 percent in September 2019.
During the same time span, the United States’ contribution of hash rate increased from just over 4% to 16.8%, making it the second-biggest bitcoin mining country. Kazakhstan’s contribution increased to about 8%, with Russia and Iran rounding out the top three producers.
The study provides a unique look into worldwide bitcoin mining patterns amidst growing concerns from companies like Tesla about how the digital currency is created.
The drop in Chinese mining power occurred even before a ban on bitcoin mining and trading by the Chinese government in late May, stressing potential financial concerns.
Anhui, in eastern China, has become the newest province to declare a blanket ban on digital currency mining in the week. The mining sector has been paralyzed in China’s major mining centers, like Sichuan, Inner Mongolia, and Xinjiang, as miners abandon equipment or relocate to areas like Texas or Kazakhstan.
After Beijing’s mining prohibition, Bitmain, China’s largest producer of digital currency mining devices, suspended sales in the previous month and announced that it was seeking for power sources in areas like the United States, Russia, and Kazakhstan.