China Mines 60% of World’s Bitcoin – What It Means

Bitcoin has become a phenomenon in 2017, the longevity of cryptocurrencies is one of the most polarizing topics of the year. The key lies in China where about 58% of the world’s large cryptocurrency mining pools are located, the U.S. has 16%.

Bitcoin Mining Location Cambridge
Source: University of Cambridge

China is significant politically, socially and for the environment. China’s governing bodies tried to shut bitcoin down, instead it has risen exponentially in price and mining activity.

Mining has grown from a simple hobby performed by early adopters on ordinary PCs into a capital-intensive industry. Mining now uses custom hardware equipment and features a specialised value chain. This is a victory Bitcoin believers champion. For non-believers this underscores the speculative and fly by night nature of bitcoin, the tulip of the 21st millenium.

In 2017 the acclaimed University of Cambridge Judge Business School Global published “Cryptocurrency Benchmarking StudyGlobal Cryptocurrency Benchmarking Study”. The report underscores the influence both China and Bitcoin mining has  on the technology sectors of the global economy.

Miners provide the necessary computing power to secure a blockchain by computing vast numbers of hashes to find a valid block. Each valid block added by a miner to the blockchain generates a reward for the miner and makes it more difficult for an attacker to reorganise the ledger and doublespend already confirmed transactions.

Mining pools are actively aiming to attract international users. All mining pools with greater than 1% of the total bitcoin hash rate offer an English language version of their website, and 63% have two or more language versions available. China clealy has the upperhand here.

Bitcoin miners alone have earned over $2 billion to date.

bitcoin mining value chain

This further evidences the evolution of cryptocurrency mining from a hobby activity in the early days to a professional industry where large amounts of capital are at stake. It is worth noting that these figures do not include revenues generated from the sale of mining hardware.  

Bitcoin Mining A Drain on Energy Conservatism = Unintended Consequences

Bitcoin mining has becomes incredibly energy heavy as more and more are mined. The complex algorithms that are used to generate or mine bitcoins becoming evermore complex and with that more energy dependent. China is not only the biggest miner of bitcoin it is the biggest producer and consumer of coal. The major server farms are in coal dependant provinces such as Xinjiang, Inner Mongolia and Heilongjian. This changes the shift of energy sources from coal to natural gas and renewable energy sources unexpectedly.

Moving forward we can see China is key to Bitcoin Mining, its use, methodology and security. The political and social impacts from future change or a breakdown are significant. What is also significant is the profits from computer and software companies. What is often overlooked is how much cryptocurrencies have affectively boosted the computing industry in a time where there was a massive vaccum since 2008 until 2016.

The China Bitcoin Miners Positive Boost To American Companies

Significant American earnings to consider:

For technology Bitcoin has become the great disrupter to where Quantam Computing is the most anticpated technology in 2018. 

Source: University of Cambridge Judge Business School Global Cryptocurrency Benchmarking StudyGlobal Cryptocurrency Benchmarking Study