Extending the scope of observation, even if there is no policy change, Bitcoin computing power is slowly leaving China in recent years.
After reaching a peak of more than 75% in 2017, the proportion of China's computing power in the entire network has been slowly declining. According to data from Cambridge University's Centre for Alternative Finance, by early 2021, China's computing power ratio had dropped to 65%, and by the end of the dry season in April, it had further dropped to 46%, a drop of nearly 20% from the same period last year.
As the cornerstone of the highly globalized cryptocurrency industry, the coming and going of Bitcoin mining in China reflects changes in international political and economic trends and the global division of labor.
Before 2018, when market logic was the dominant factor in transnational economic activities, China became the global mining machine production center with a complete and fast supply chain, and this position has remained to this day.
This is a story that has been repeated many times in the past ten years in emerging hardware fields such as mobile phones, drones and sweeping robots. Relying on the supply chain advantages and engineer dividends of the manufacturing industry, R&D personnel in Beijing and assembly line workers in Shenzhen can work together. They quickly mass-produce new equipment, make prices more affordable, and have more agile iteration capabilities, at least leading the world in terms of shipments.
In the next period of time, as Chinese mining machines and mines go overseas, China will further enrich its role as a global manufacturing center in the mining industry: factories in Guangdong, Zhejiang, Shandong, and Jiangsu will have the opportunity to produce transformers for overseas mines. Among the popular overseas destinations, the quotations of Chinese manufacturers are far lower than those of their counterparts in developed regions, and the quality is more reliable than those in regions with relatively backward production capacity.
Chinese container manufacturers have also begun receiving orders for overseas mining services. This is a trend in the current mining industry, that is, directly stacking mining machines into modified containers for mining, which can save the time for building fixed buildings, so that mining machines that go out to sea can ""dig right when they land"" and start faster.
However, the mining price activities gathered in China relying on the advantages of mining machine supply and cheap electricity also bring a series of problems: before the ban, China was the country with the largest energy consumption for mining - according to the data of the Cambridge University Center for Alternative Finance, 2020 , China's energy consumption in bitcoin mining may be 78.8 billion kWh, which is close to the annual power generation of Algeria, a North African oil-producing country with a population of 43 million.
Some observers believe that the Chinese government cracks down on mining precisely because it consumes a lot of energy, disrupts the regular planning of the power grid, and may hinder the achievement of the carbon peaking goal.
On the other hand, since 2018, with the changes in the international environment, the mining industry has spontaneously left China. Even the most advantageous mining machine production links in China tend to go overseas.
Bitmain, the leading mining machine manufacturer, opened a production line in Malaysia in 2018. A person close to Bitmain said that Bitmain is considering expanding its production capacity in Malaysia. Mining machines exported directly from Malaysia rather than China to the United States can be exempted from the 25% punitive tariff.
An overseas rival of Chinese mining machine manufacturers, the Israeli mining machine company Spondoolies, which ceased operations in 2016, has also recently shown signs of revival.
In August of this year, Canadian bitcoin infrastructure company Blockstream acquired the intellectual property rights of Spondoolies and said it would launch Blockstream-branded mining machines in the third quarter of next year.
"I thought that the mining machine was a war that ended long ago, but I didn't expect it to be repeated." A practitioner sighed.
Due to the logic of globalization in the past, China once became the world's mining center. With the new rules of global interaction that pay more attention to geopolitical and regulatory factors, China'sChina's cryptocurrency mining industry is slowly losing its former status.
The peculiarity of cryptocurrency mining is that it is very "stubborn" or "difficult." In this distributed network, once the mining nodes spread to a certain range and the network scale exceeds a certain lower limit, unless there is global linkage, it is difficult for any single entity to press the stop button for the entire industry. Of course, a strong government can at least drive an unwelcome cause out of the country.
In a sense, the "de-Sinification" of mining is something both the Chinese government and the global cryptocurrency community are happy to see.
The former can better maintain financial stability and achieve the goal of peaking carbon and environmental protection; the latter has obtained a more decentralized Bitcoin network that they have always wanted.
Bitcoin Market - Comes from globalization and back to it
