China Bitcoin Mining Ban – Winners and Losers

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  • The Bitcoin mining ban by the Chinese government had led to victory for some and disaster for others
  • Countries like America and Kazakhstan have profited, while Bitcoin itself has suffered
  • Who are the big winners and losers from China’s Bitcoin ban?

The China Bitcoin mining ban that made headlines around the world in May has had a huge impact in the industry in a variety of ways. Some entities have benefited while others have lost out, and in this piece we look at some of the key winners and losers in the last two months.

Winners

United States

The U.S. has been one of the major winners of the China Bitcoin mining ban, solidifying its place as the second largest Bitcoin miner by taking a greater share away from China than any other country. Some Chinese miners have shipped their equipment over to China to start again, while existing Bitcoin miners have picked up the slack left after the China exodus.

With developments such as nuclear powered and advanced fission-powered plants offering their services to Bitcoin mining firms as well as those already powered by wind, the U.S. is also becoming one of the most environmentally conscious Bitcoin mining locations.

Kazakhstan Government

As we revealed yesterday, Kazakhstan has become a surprise winner in the aftermath of the China Bitcoin mining ban. The country’s government officially welcomed Bitcoin mining operations in 2020, and the exodus from its neighbor has kicked up its domination massively, putting it in third place. This is great news for the government, which levies a 15% tax on Bitcoin mining operations. Kazakhstan is the country that has seen the second biggest hashrate growth since the Chinese exodus began.

Other Bitcoin Miners

Losing China’s Bitcoin mining input is like losing its manufacturing input to the rest of the world – there would be a short, sharp shock as the world adjusted before other manufacturers took advantage. This is what is happening here. The dramatic collapse of the hashrate and resultant difficulty adjustment has led to other Bitcoin mining companies filling the gap and increasing their earnings, rewarding those who continued building even while China was dominating.

Mainstream media

They got to bash Bitcoin again, enough said.

Losers

Chinese Bitcoin miners

Sounds obvious to say, but these guys are the biggest losers from the China Bitcoin mining ban. The closures have been swift and brutal, the first time the Chinese government has actually followed through on a threat like this. As we have said, some have packed up and moved out while others have simply shut down…for now.

Bitcoin Hashrate

The Bitcoin hashrate has taken a savage nosedive following the China Bitcoin mining ban, which some have warned could lead to stability and security issues. Since peaking at 197.6 exahashes on May 13 the hashrate has dumped 65% to a low, for now, of 68. This record drop seems to have subsided, helped by a record difficulty adjustment, leading to hopes it can start to recover.

The Planet

A debatable one, given that the U.S. is investing heavily in renewable mining and the closure of so many Bitcoin mining farms in China should reduce the energy consumption and CO2 emissions. However, it is thought that many Chinese Bitcoin miners are simply lying low before starting up again, while Kazakhstan’s energy comes chiefly from burning coal.

America’s environmentally friendly mining farms are still mainly in the development or even just the design stage, and with China’s hydroelectric powered mining farms being killed off too, fossil fuels are going to power Bitcoin mining for the foreseeable future.

Kazakhstan uses plenty of coal-fired power stations, but with many Bitcoin miners being put out of action completely just weeks ahead of the time when miners relocate from hydroelectric regions to areas powered by coal-fired power stations, the emissions from Bitcoin mining should be reduced overall.

Bitcoin Mining Ban Impact Yet to Play Out

As we can see China’s Bitcoin mining ban has touched many companies and countries, and the Bitcoin world is still reeling from the shock. We likely won’t get a clear picture of the Bitcoin mining landscape until next year, by which time the winners and losers may have seen some additions to their ranks.

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