China shattered homegrown Bitcoin mining forcing miners to crypto-friendly nations that include Kazakhstan, Canada, and United States. The exit of many Bitcoin mining businesses in China has resulted in falling hash rates. Bitcoin hashing performance has reduced from 180 exhashes per second (EH/s) to84 EH/s in just 21 days.
Blockchain.com attributed the decline of hash rate performance to the drop of Chinese miners. However, recent data suggest that mining difficulty started increasing on 3rd June. However, the hash rate has increased by 21.38 percent recently as migrating Chinese miners start their operation in other regions.
The adjustment in mining difficulty resulted in higher computational costs. The computational costs are expected to continue increasing as more formerly China-based miners come back online. Miners have been on the lookout for countries that offer cheap electricity and have clear regulations.
China’s authority started cracking down on cryptocurrency under the pretext of shielding its citizens from high-risk investments. Businesses were forced to either limit their crypto portfolio offering or move offshore. Wang Juana, a member of China’s OECD Blockchain Expert Policy Advisory Board, believes the cryptocurrency market in China has entered into a path of isolation.
In September 2019, China contributed 75.53 percent of the global Bitcoin hash rate. Now, China’s hash rate contribution stands at 46.04 percent, and the United States has expanded to 16.85 percent. Jurisdictions including Canada, Russian, and Kazakhstan have also seen an increase in mining activities mostly from migrating Chinese miners. Experts believe that China’s ban on the crypto industry is a positive move towards the decentralization of the crypto ecosystem.