Chinese Bitcoin Miners now control 66% of the processing power of the cryptocurrency network (hashrate), according to a study of CoinShares, manager of digital assets.
12 December, 2019 | AtoZ Markets – In the latest report, CoinShares said that 66% of the world’s bitcoin mining takes place in China. And Chinese Bitcoin Miners alone produces 54% of the global hashrate in Sichuan Province. The remaining 34% of bitcoin miners are distributed from the United States to Russia and Kazakhstan.
Chinese Share of Bitcoin Hashrate
China’s share of the hashrate was 60% in June. It would be the highest recorded by CoinShares since it started tracking the hashrate almost two years ago. CoinShares said that the development of the past six months had been mainly one of expansion.
“More than anything, miners have benefited from increased cash flow, particularly in the spring and summer. The rejuvenation of bitcoin prices is to reinvest in more powerful and efficient mining equipment. Both secure their share of the network against the arrival of the next generation of material. And that is an effective preparation for the next block rewards by halving.” It is according to the report of Christopher Bendiksen, chief research officer at CoinShares and Samuel Gibbons, researcher at the firm.
According to the report, significant improvements have also been made to mining equipment in the bitcoin network. The leading players are Bitmain (with their Antminer series 15 and 17) and MicroBT (Whatsminer series 10 and 20). Bitfury (Clarke chipset), Canaan (Avalon series 10), Innosilicon (T3 unit), and Ebang (model E10) also contributed, according to CoinShares.
Bitmain’s Declining Market Share
Bitmain is one of the critical players. But its market share by hashrate has gone from around 70% in June to about 66% now, according to the report. In June 2017, Bitmain’s estimates (via Frost and Sullivan) showed that it had a market share of around 75%.
“Bitmain needs new capital mainly to heal a series of self-inflicted wounds caused by poor strategic decisions.” Bendiksen and Gibbons added, “Judging by the internal leaks, the financial statements released as part of the failure of their IPO offer in Hong Kong. Bitmain has also suffered a malicious serial investment, ranging from failed tape-outs, hardware overproduction, and excessive recruitment. The catastrophic performance is probably the captivity of BCH (bitcoin cash). These factors have contributed to balance sheet problems. It is according to an internal memo recently disclosed by the president and co-founder of Bitmain, Jihan Wu. He has almost sunk the business in early 2019. “
CoinShares added that at current bitcoin prices, the average miner would be profitable. However, the reward will halve in the spring of 2020. “Older engines like the venerable Antminer S9 widely deployed in the network. It will likely approach the end of its useful life unless the price bitcoin is not increasing significantly.
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