Bitcoin Mining Bookkeeping Shifting to North America as “De-Chinaing” of Computing Power Intensifies?

The global Bitcoin mining computing power is currently undergoing a transformation, with North American mining companies led by Musk vying for the right to keep track of Bitcoin mining around the world.

Recently, a new round of regulatory storm hit the cryptocurrency industry, ushering in the darkest moment.

CoinMarketCap data shows that from May 12 to May 25, the total market capitalization of the cryptocurrency industry as a whole retreated, with market capitalization shrinking by more than one trillion dollars, down by as much as 40% at one point.

Bitcoin Mining Bookkeeping Shifting to North America as "De-Chinaing" of Computing Power Intensifies?

On the news, since May 18, first three associations issued a notice prompting to prevent the risk of virtual currency trading speculation, followed by the Inner Mongolia Development and Reform Commission issued a “Notice on the establishment of a reporting platform on virtual currency “mining” enterprises”; followed by the State Council Financial Stability Development Committee held its fifty-first meeting said to crack down on bitcoin Coin Mining and Trading ……

The cryptocurrency industry has been in a state of flux for a while, with cryptocurrency prices plummeting and market panic spreading. At the same time, the shutdown of domestic mining farms and the forced migration of miners to the sea have also become a “foregone conclusion”.

Chinese Miners Forced to Go Overseas, 65% of Computing Power May Face Transfer
Mining is a “black word” in the Bitcoin industry, which refers to the use of the chip’s computing power to constantly “hash collide” in the blocks generated by the Bitcoin system to win the right to keep track of the accounts and thus receive the system’s reward of Bitcoins.

Chinese miners have been dominating the global bitcoin mining network. According to data released last year by the Cambridge Centre for Emerging Finance (CCAF), Chinese miners account for 65.08% of the world’s total mining power. They are followed by the United States, Russia, Kazakhstan, Malaysia and Iran in that order. Upon inquiry, this data also matches data previously released by crypto capital management firm CoinShares that Chinese mining pools already owned 65% of Bitcoin’s network-wide computing power as of the end of 2019.

Bitcoin Mining Bookkeeping Shifting to North America as "De-Chinaing" of Computing Power Intensifies?

(Source: https://cbeci.org/mining_map)

CCAF data also shows that Chinese miners are mainly located in four provinces, Xinjiang, Sichuan, Inner Mongolia and Yunnan, but the share of which changes with the seasonal share. This is because Xinjiang and Inner Mongolia are rich in thermal power resources, while Sichuan, Yunnan and other southwestern regions are rich in hydropower resources. However, when the southwestern region enters the abundant water period starting from April every year, the share of thermal power mining is significantly inferior to that of hydropower.

For a long time, these two regions have been the mecca of domestic mining. Until 2020, at the United Nations General Assembly, China pledged to strive to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.

In front of this environmental goal, control energy consumption and reduce thermal power into the focus of work. As early as March this year, the Inner Mongolia Development and Reform Commission issued an announcement that the comprehensive cleanup and shutdown of virtual currency mining projects, all out by the end of April 2021, and new virtual currency mining projects are strictly prohibited.

At that time, domestic miners and mine owners felt the pressure.

Some miners chose to wait and see, expecting a more detailed policy document to come out; some small cost miners entrusted their miners to resell, while some capable and resourceful miners and mine owners chose to relocate their miners to the southwest of China or some low-cost areas abroad. And considering the uncertainty of the subsequent domestic regulatory policy and the replacement of the southwest region’s bountiful and dry periods, some miners are taking one step forward and choosing to migrate their mines directly to the sea, especially to Central Asia and North America, where electricity costs are relatively low.

Bitcoin Mining Bookkeeping Shifting to North America as "De-Chinaing" of Computing Power Intensifies?

“Coveting the power of arithmetic? Musk and North American miners are getting very close lately
While the Chinese government is trying to crack down on bitcoin mining and mining companies are being forced to go offshore, Musk across the pond is also starting to make things happen.

In a social media post this morning, Musk said, “Talked to some North American bitcoin miners who have committed to posting current and planned renewable energy consumption, and are calling on miners around the world to do so. This could have a future.”

Bitcoin Mining Bookkeeping Shifting to North America as "De-Chinaing" of Computing Power Intensifies?

(Photo credit: Twitter screenshot)

Shortly after Musk’s post, MicroStrategy CEO Michael Saylor then retweeted the post and revealed that he hosted a meeting last Sunday with both Musk and North America’s leading bitcoin mining organizations in attendance. These institutions agreed to form the Bitcoin Mining Council to increase transparency in energy consumption and accelerate sustainability activities worldwide. These mining companies include Argo Blockchain, Blockcap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, Marathon Digital Holdings, and Riot Blockchain, among others.

Shortly after Musk’s tweet, bitcoin prices moved higher, once approaching the $40,000 mark, back up more than $6,000 from the intra-day low, a 24-hour gain of nearly 20%.

In response to the current contrast between domestic bitcoin mining, which is experiencing strong regulation, and the establishment of a bitcoin mining committee abroad under Musk, there has been much debate. Some say that a battle for the dominance of global bitcoin arithmetic is kicking off; others say that this wave of arithmetic migration is going to come faster than expected, after all, the spearhead is pointing directly at Chinese miners ……

Weixing Chen, founder of Pan City Capital and Fast Taxi, pointed out that “Bitcoin mining is just a way to motivate users to participate in bookkeeping when Satoshi Nakamoto designed the system in the first place, not mining. If Bitcoin succeeds, this so-called “mining” is the financial bookkeeping power of the digital world, which will evolve into a power similar to the enhanced swift, which will be responsible for clearing not only the reserve currency, but also most of the core human assets …… “

In this regard, the researcher of Eurotech Cloud Chain Research Institute said, “The global bitcoin mining arithmetic is currently undergoing a change, with North American mining companies led by Musk competing for the right to keep track of bitcoin mining on a global scale. In the context of increasingly stringent regulation, China will likely no longer be the home base for bitcoin mining, and its pre-existing advantages of chips, mining machines, pools, and mining farms accumulated over the past decade or so will be weakened or even replaced.”

Consequences: Does the drop in arithmetic power affect bitcoin prices?
It is worth mentioning that this miner migration out of the sea, the outside world is not only concerned about the transfer of mining bookkeeping rights, but also more concerned about the impact on bitcoin caused during the network-wide arithmetic power redistribution, especially the price. Under heavy pressure, the global arithmetic power pattern redistribution is an indisputable fact, during this period, bitcoin mining arithmetic power is bound to produce fluctuations.

OKLink data shows that in the last week, BTC’s network average arithmetic power has declined, and as of now, the network average arithmetic power is 146.04EH/S, down nearly 20% from the May 12 high of 180.17EH/S.

In contrast to recent market performance, many people believe that this round of coin price decline may be caused by the decline in bitcoin computing power. But this argument doesn’t seem to hold water.

What exactly is the connection between arithmetic power and coin prices?

As we all know, the increase in bitcoin’s network-wide arithmetic power means that more people are involved in mining, or that miners have more and more mining machines. Based on this, we can also see the main factors that affect the bitcoin network-wide arithmetic power, namely the price of mining machines, the technology of mining machines, and the enthusiasm of miners to participate in mining. As we can see, the price of the coin cannot directly affect the arithmetic power, but it is worth noting that as the price of the coin rises, the enthusiasm of miners to participate in mining will become higher, and the enthusiasm of miners will fuel the climb of arithmetic power. Of course, there is a certain time lag in between.

So, does the size of the arithmetic power determine the rise or fall of the coin price? Here, we can also think back to the arithmetic war between BCH and BSV, when the two sides competed for arithmetic power, but the price of the two forks did not appear to be endlessly soaring. As you can see from this case, arithmetic power does not determine the price of a coin. Moreover, according to the Bitcoin difficulty adjustment setting, the total amount of Bitcoin mined in a fixed period of time is constant, and an increase in arithmetic power will not have any effect on its output, nor on the price of the coin.

Today, Bitcoin is a global public facility with nodes all over the world, and as a peer-to-peer distributed system, its biggest feature is that it is “single point of failure resistant”. Of course, there are some people who worry about extreme situations where a country’s computing power suddenly shuts down, the computing power drops dramatically, and Bitcoin’s difficulty adjustment mechanism doesn’t react quickly enough to slow down the exit speed.

However, there is no need to worry about this, because when the arithmetic power drops dramatically, it means less competition between miners and higher mining revenue, and at this time, more and more miners will enter the industry, even if some of the “energy ratio” behind the mining machine will also be back on the shelves. So, even if this extreme situation happens, it will not have a big impact on the stability of the Bitcoin system.

In conclusion.

Nowadays, with the development of technology, human’s environmental awareness is also strengthening, in terms of bitcoin mining, both domestic and foreign miners, migration between regions does not solve the fundamental problem, the essence is to find the ultimate solution, that is, to find clean energy for mining.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bitcoin-mining-bookkeeping-shifting-to-north-america-as-de-chinaing-of-computing-power-intensifies/
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