It seems that the Great Miner Migration began even before the latest exodus from China. That country’s share of global Bitcoin (BTC) hashrate started declining before the latest government crackdown, while that in other countries has seen an increase, found the Cambridge Centre for Alternative Finance (CCAF) at Cambridge Judge Business School.
China’s ‘war’ against Bitcoin miners (re)started in June 2021. It has led a number of major miners to close shop and decide whether to pack and move to more miner-friendly countries. It has also put small miners in jeopardy, as they cannot afford to move. Yet, crypto insiders agree that the miner migration is beneficial for the network as it leads to the hashrate being spread globally, rather than most of it being in China.
But new data by Cambridge Bitcoin Electricity Consumption Index (CBECI), an independent platform for information and insights on Bitcoin’s electricity consumption, suggests that the country’s hashrate (the computational power) has already been in a "significant decline for some time" before the actual crackdown on mining, according to Michel Rauchs, Digital Assets Lead at the CCAF.
The new data gathered by the CCAF shows that China’s share of total Bitcoin mining power has declined from 75.5% in September 2019 to 46% in April 2021, or before the restrictions were imposed.
Notably, there is an increase in the United States’ share of total Bitcoin hashrate in the same period, from 4% to 17%, putting it in second place, says the report.
Furthermore, there is a nearly six-fold increase of mining share in the energy-rich country Kazakhstan, from 1.4% in September 2019 to 8% in April 2021, thus jumping to third place in global mining power share.
The fourth and fifth place are taken by the Russian Federation (7%) and Iran (5%).
The new geolocational data was collected in collaboration with four Bitcoin mining pools: BTC.com, Poolin, ViaBTC, and Foundry. The dataset, which represents approximately 37% of the Bitcoin network’s total computing power, provides empirical view of the geographical evolution of Bitcoin mining, and "confirms for the first time the seasonal migration patterns in China that have only previously been anecdotally observed."
It shows miners migrating from the Northern Province of Xinjiang in the dry season, to the Southern Province of Sichuan in the rainy season, which Sichuan’s share of China’s total Bitcoin mining power increasing from 15% at the beginning of the wet season to 61% at the peak in 2020.
"This seasonal migration has materially affected the energy profile of Bitcoin mining in China, which until now has been by far the largest ‘mining market’, illustrating the complexity of assessing the environmental effects of mining," Rauchs said.
Given that the mining operations in the country have been banned, this seasonal migration pattern within China may end. Following the ban, China’s hashrate disappeared overnight, Rauchs said, suggesting that miners and their equipment are on the move, but the question to where still remains.
"Gains in the US and Kazakhstan might be an indicator, but the next upcoming data updates reflecting the impact of China’s mining ban will provide greater clarity as to where the hashrate has moved," Rauchs said.
— Surprise! An ESG-Conscious Giant Increases Indirect Exposure to Bitcoin
— Bitcoin Mining Profitability Jumps, Hashrate Starts Picking Up Too
— Crypto Mining Rigs ‘Selling Like Scrap Metal’ as Mainland China Mood Darkens