China: migration of miners before government crackdown

According to data presented by the Cambridge Center for Alternative Finance research team, participation in Bitcoin mining dropped dramatically in China ahead of the government crackdown last June.

Likewise, the Finance Center indicated that the participation in Bitcoin mining has decreased from 75.5% in September 2019 to 46% in April of this year, being that, in the same period, the participation of the United States increased from 4.1% at 16.8%. Similarly, the mining participation of Kazakhstan increased from 1.4% to 8.2% in the same period of time.

On the other hand, the Cambridge Bitcoin Electricity Consumption index platform was launched in 2019, in a context of concern about the sustainability and environmental impact of Bitcoin mining.

In fact, based on the environmental impact that Bitcoin mining would have, the Chinese government has limited it and even, in some provinces, has prohibited it. On this argument, State Grid, an energy provider, has been one of the main defenders since it alleges electricity shortages in sectors of the country. He has even indicated the risks in Bitcoin to excuse the creation of the digital yuan.

According to Criptonoticias, It was also reported the annual migration of miners, from northern provinces to the south, in order to take advantage of the low-cost electricity generated by the hydroelectric plant. Indeed, the mining participation of Bitcoin in China increased from 149% to 61.1% in rainy seasons, however, this situation changed with the total suspension of Bitcoin mining.

Now, with the recent Chinese government bans on Bitcoin mining in their country, miners and their teams have been forced to move elsewhere, with increased participation in countries such as the United States and Kazakhstan being a huge factor. Indicator of where they are heading, which is also reflected in the processing power of Bitcoin miners.

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Andrea Norabuena
Lawyer from the Pontifical Catholic University of Peru with a Specialization in Consumer Protection from the same House of Studies. Member of the Lima Bar Association. He has experience in consumer protection, intellectual property and competition law. His career includes INDECOPI, law firms and companies. Currently, she is an independent consultant.

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