China's Bitcoin Miners Exodus to the West.
In May, Beijing called for a severe crackdown on bitcoin mining and trading, setting off what’s being dubbed in crypto circles as “the great mining migration.” China has long been home to more than half the world’s bitcoin miners, but now, Beijing wants them out ASAP.
Mining is the energy-intensive process that creates new coins and maintains a log of all existing digital tokens. The way this exodus is measured is by looking at Bitcoin's hashrate, an industry term used to describe the computing power of all miners in the bitcoin network. It can also be the cumulative processing power of the network. The higher the hash rate, the healthier the blockchain is. Hence, it's a perennial process that cannot afford hiccups at a massive scale.
China contributed up to 65% of the Bitcoin hash rate, followed by the US, Russia, Kazakhstan, Malaysia, and Iran. Amid the sudden crackdown, Bitcoin’s hash rate is down by almost 40% from its peak. One of bitcoin’s greatest features is that it is totally location agnostic. Miners only require an internet connection, unlike other industries that must be relatively close to their end-users.
Although China’s announcement hasn’t been cemented in policy, that isn’t stopping miners like Alejandro De La Torre from cutting their losses and making an exit. “We do not want to face every single year, some sort of new ban coming in China,” said De La Torre, vice president of Hong Kong-headquartered mining pool Poolin. “So we’re trying to diversify our global mining hashrate, and that’s why we are moving to the United States and to Canada.”