Bitcoin hashrate nears full recovery from China’s mining crackdown

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The Bitcoin mining hashrate has now fully recovered to its May level when China imposed a blanket ban on cryptocurrency trading, mining, and all related activities.

The hashrate is a measure of the computational power required per second when mining cryptocurrency. To put it simply, it’s the speed of mining. In the case of Bitcoin, the more mining, the higher the hash rate. It should be noted that when the hash rate is faster, the chances of mining more Bitcoins per second increase.

Interestingly, China accounts for over 75% of Bitcoin mining, according to a study published by the peer-reviewed journal Nature Communications in April. The country went from controlling up to 75% of all Bitcoin mining operations worldwide in April to no longer contributing to the industry at all by July 2021, according to data compiled by the Center for Alternative Finance of the University of Cambridge.

According to Cambridge Bitcoin Electricity Consumption Index (CBECI), China’s global hash share was around 34.2% in May this year. And in 2019, the country accounted for around 75% of the average monthly hashrate share, a significant portion of global Bitcoin mining.

But from May to June 2021, following the further decline in mining activity in China, the global hashrate experienced a sharp decline, meaning the energy required to mine Bitcoin increased, making it even difficult for miners. to perform the large number of calculations that are required for mining cryptocurrency.

However, miners have now set up operations in North America, which has allowed Bitcoin’s hashrate to return to its May levels. Data from BTC.com on Friday shows that Bitcoin has since recouped those losses, a promising sign for the sustainability of the network.

Chinese authorities claim that cryptocurrencies disrupt the economic order and facilitate illegal asset transfers and money laundering. Authorities accuse the cryptocurrency miners of wasted energy, fatal accidents in coal mines, and a potential threat to the country’s efforts to reduce carbon emissions. The country aims to become carbon neutral by 2060.

Earlier in November, China told its government companies to stop mining cryptocurrency and said it would raise electricity prices for any institution that abuses its access to subsidized electricity. to participate in crypto mining.

“The National Development and Reform Commission (NDRC) plans to crack down on industrial-scale Bitcoin mining as well as any involvement of state-owned enterprises,” said Meng Wei, a spokesperson, at a press conference. She added that mining and trading in crypto carries “significant risks” and attacked the crypto industry, calling it “blind and disorderly.”

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