The hash rate is falling, Chinese miners are unplugging their devices in droves and Bitcoin is falling. But instead of panicking, Bitcoiners should welcome the geopolitical reorganization of the hash rate.
There is no other way to put it: the Chinese mining exodus is in full swing. After several district governments pulled the plugs out of the mining rigs, the hash rate is on the decline. The accumulated computing power in the network is currently just over 100 exahashes per second (EH / s) and is thus at the level of a year ago. It is clear.
It remains to be seen how well thought out the step was. Bitcoin mining in China was not only a grateful cash cow for the mining companies themselves. The power plants had also made a substantial contribution to the digital gold rush in the Middle Kingdom. After all, electricity in China is cheaper than anywhere else in the world. The Chinese pay an average of just 0.09 US dollars per kilowatt hour (KW / h) of electricity. This is primarily due to the fact that hydropower plants, for example in Sichuan or Yunnan, are part-state entities that were built with government subsidies. The problem that the miners had previously solved was that the power plants are usually in remote, rural areas. However, there are no buyers there: inside for the energy surplus and so the power plants will probably have no choice in the future “but to conduct the electricity into the ground”, as mining expert Peter Marggraff told BTC-ECHO on record would have.
Bitcoin: Strengthened from the crisis
For Bitcoin, however, the geopolitical reorganization of mining is undoubtedly good news. Again and again, critics had turned up in the direction of China with a wrinkled nose and were angry about the alleged centralization of the network. With the departure of the mining caravan, for example to Kazakhstan, Russia or the USA, the distribution of the mining nodes on paper is likely to become much more decentralized – even if the threat to the network caused by the supposed concentration of rigs in the Middle Kingdom was thematized, was never big anyway.
It is surprising, even for die-hard hodlers, that BTC survived this exogenous shock so unscathed. The rate has even fallen below $ 30,000 in the meantime. But it did not last long and Bitcoin is already back in the corridor between 30,000 and 35,000 US dollars. Should the trend continue and even more mining companies migrate to Texas and Co., Bitcoin will emerge stronger from the crisis again. After all, the hash rate would not only be more distributed, but also greener. Texas is increasingly relying on green wind energy.