In the latest bitcoin news, a recent study has revealed that China controls two-thirds of computers and networks that are involved in the mining of bitcoins. The power, which is termed as hash rates, refers to the energy used by a computer in the production of new coins. Miners in China collectively control 66 percent of hash rates in the world, signifying how profitable it is to mine bitcoins in that country. This record figure is of great importance to the mining industry in the country.
Provinces like Yunnan, Xinjiang, and Sichuan are hotbeds of mining activities, with Sichuan accounting for over half of the world’s hash rates. This was made known by Coinshares. China has always controlled a greater part of the world’s mining power, with its hash rate accounting for 60 percent in June. Coinshares revealed that the 66 percent figure is the highest they have ever recorded since they started following the numbers in 2017.
On what could have caused the increase, head of Research at Coinshares, Chris Bendiksen, suggested that it could be due to an increase in the use of sophisticated and advanced mining tools, which would generally give the miners an edge, citing that if they can increase their production first, in regards to their hash rates, and do so before their competitors, then that’s generally good.
Unsurprisingly, China is home to two of the world’s biggest manufacturers of bitcoin gear. Canaan is one of the two and in November they raised over $90 million in a public offering, however, the money was less than they expected. The other company is Bitmain and there is talk that their company is on the route of monopolizing the mining industry since its currently 75 percent of the shares of mining tools sold worldwide. Another hardware giant, MicroBT also has its foot in China, however, they have been facing issues these days, as relating to the alleged use of Bitmain’s intellectual property. Without a doubt, China is a good place for investors who choose to invest in mining gear because there is a ready, ever-rising market.
As bitcoin mining becomes increasingly tough, because many individuals are now into it, making the mathematical equations and sequences more complex, the hash rate has also had a rise. Although that can be said to be a result of the gear now used.
The Rise of Chinese Cryptocurrency
Even though the country has a huge grip on the world’s bitcoin production, it still has not received the support of the state, which has always tried to stifle the growth of bitcoin mining and other crypto-related matters. China has always been known to oppose many innovations, however, its citizens have always found ways to bypass it.
Although recently, the government has slowed down their pace of crackdowns and have confirmed that they would not ban cryptocurrency or its mining. This may be necessary as the country plans to introduce its cryptocurrency.
As confirmed by the People’s Bank of China, China has been researching for their new currency since 2014 and are so close to issuing it. But unlike bitcoin, only banks would have the ability to issue the coins.
The country has also taken steps to prepare people’s minds for bitcoin, as they are now banning adverts and other media that put bitcoin and blockchain in a bad light. This is quite necessary if the government wants the people to readily accept the new cryptocurrency at the time of its launch. Even days before, President Xi Jinping, hailed the technology as something “important”. This U-turn may seem surprising but is not at all strange.
China has always had a response to things coming from the West, making them ban it from their country. Popular social media apps used around the world have their alternatives in China. Their decision to own their cryptocurrency follows that line. On whether they would allow private groups and individuals to mine their coins, no one is quite sure. But knowing China, it would be a surprise if they do allow it.
As China sets to reveal their bitcoin next year, they are planning to pass a law in January that would, among other things, aid the growth and development of cryptography. Industry experts are praising China’s move, seeing it as a recognition of what the future holds for cryptocurrency and advising other countries to follow China’s path.
No doubt, if China is going to roll out cryptocurrency soon, they would have to have an amount that can take care of their large population, as well as provide means for those who do not have smartphones, which is almost half of the population, to still be able to access it.