China’s State Council committed to cracking down on cryptocurrency trading and mining this May in an attempt to combat the financial risk that comes with speculative trading.
In 2020, cryptocurrency mining firms based in China mined around two-thirds of the total Bitcoin minted that year, with two of these firms providing around 50% of the total global “hash rate” energy used to mint Bitcoin, which has been a topic of concern due to reports that Bitcoin could contribute to global warming.
In a July article written for Fortune magazine, journalist Sophie Mellor wrote that if China were to eliminate cryptocurrency mining, it would eliminate half of the total energy dedicated to mining cryptocurrency.
But of course, it’s not that simple. These miners won’t just disappear after a ban. Following the Chinese crypto mining ban, we saw a spread of China’s mining power across the globe, from cold regions of Russia to areas like Texas, where U.S. oil and gas executives suggested that cryptocurrency miners could use surplus natural gas to generate electricity.
This exodus of the hash rate moving out of China could be good news for Bitcoin’s independence.
The two aforementioned firms that provided around 50% of the total global hash rate could have easily worked together — or have been forced to work together by the Chinese government —