Two months after Beijing banned crypto mining this year, the United States has overtaken China as the world's largest source of bitcoin mining, new data shows.
May July decelerated China's global hash rate - the computing power needed to create bitcoin - from 44 percent to zero, according to figures released Wednesday by the Cambridge Center for Alternative Finance. The country accounted for three quarters of the global hash rate in 2019.
The global hash rate of the United States increased from 17 percent in April to 35 percent in August, while Kazakhstan increased by 10 percentage points to 18 percent over the same period.
China's State Council, or cabinet, banned cryptocurrency mining and trading in May, citing environmental and financial concerns. The decision caused an exodus of miners looking for cheap energy and crypto-friendly politicians.
China's ban on bitcoin mining has resulted in a "massive mining exodus," said Sam Tabar, chief strategy officer at Bit Digital, a New York-based bitcoin miner. The company suspended its operations in China, which it had been closing since October 2020, following the ban.
Michel Rauchs, digital asset leader of the closely watched Cambridge audience, added that the impact of the Chinese pressure is an increasing geographic hash distribution around the world, adding that this can be seen as a positive development for network security and decentralized policies.
Miners outside of China enjoyed the digital currency spree in the months following the ban as Chinese competitors rushed to relocate their operations.
Beijing has gone further and since expanding the ban including foreign operators, tagging all crypto "illegal" related activities "last month".
China is launching its own digital currency, which officials hope to be prosecuted at the Beijing Winter Olympics in February 2022.
“The China shutdown was great for the industry and US miners,” said Fred Thiel, CEO of Marathon Digital Holdings, a Las Vegas-based crypto mining company. “Overnight, fewer players were chasing the same limited edition coins. ”