Post-Halving Mining Analysis: China's Dominance Decreases, Rise of the US, Russia, and Kazakhstan

The much-anticipated third Bitcoin halving officially took place on May 12, and the crypto community is mostly optimistic about it. Opinions on the price vary, with speculations such as impending mining difficulty, and the halving leading to a price surge. Bitcoin has touched the $10,000 mark several times, seemingly unaffected by the halving.

However, changes are occurring in the Bitcoin ecosystem beyond its price. According to a report by TokenInsight, China is losing its dominant position in the Bitcoin mining industry. The data summary is as follows:

• • China's hash rate has decreased from 75.63% in September 2019 to around 65.08% currently
  • The U.S. hash rate has increased from 4.06% to 7.24%
  • On May 20, Bitcoin mining difficulty decreased by 6%, marking the 16th largest adjustment in history
  • With reduced rewards and increased transaction volume, miner transaction fees are oscillating in the range of 18% - 24%
  • North America is beginning to support the mining industry by introducing funds and institutions with professional operational and risk management capabilities

China's Mining Power Declines, U.S. Seizes Market Share

Earlier in early May, it was reported that according to the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge's Bitcoin mining distribution map, China's mining power accounted for 65% globally, with the majority concentrated in the Xinjiang region. TokenInsight also cited this data:

As of April this year, the United States is the second-highest country in terms of mining power share, accounting for 7.24%; Russia ranks third with 6.9%; Kazakhstan, Malaysia, and Iran account for 6.17%, 4.33%, and 3.82% respectively.

Among them, Kazakhstan's mining power was only 1.42% in September last year, soaring to the current 6.17% this year, an increase of 334.51%.

TokenInsight also found that after the major drop on March 12th this year, Bitcoin mining's lowest annual power consumption showed a decline, believing that power consumption to some extent reflects the miners' sentiment. When the market is not optimistic, miners' attitudes also tend to be negative.

Overseas Mining Farms Expected to Rapidly Develop

The report pointed out that from 2019 to 2020, the updated regulatory policies of various countries' governments indicate that government-level support has begun to show, with policies leaning towards supporting the healthy development of the industry, including issuing licenses and regulatory scales.

Previously reported, Ukraine advocated a "zero-regulation mining" policy in February this year, and in May, the country's Ministry of Energy negotiated the feasibility of "mining with surplus power from nuclear power plants"; Uzbekistan announced in January that establishing a "national mining pool" was a priority for 2020, with participating miners enjoying low electricity prices, and will launch a compliant licensed cryptocurrency exchange to facilitate miners in selling cryptocurrencies.

Although there is still a great deal of uncertainty about future policies, the above policies still show the transformation of various countries' regulatory attitudes towards the mining industry. TokenInsight believes that overseas mining farms will explode in construction at a faster pace in the next two years, mainly due to:

1. More stable regulation regarding digital assets
2. A more systematic regulatory framework
3. Gradually increasing investment demand in digital assets from traditional investors
4. Bitcoin mining easing power demand, solving the problem of weak electricity prices during periods of weak power demand

A Year of Iterative Transformation in Mining Industry

Although China still holds an absolute advantage in Bitcoin mining power, with the development of the mining industry and the support of related policies, TokenInsight points out that more and more scaled traditional financial capital and secondary market financial service providers will enter the industry, whether in China or foreign markets.

2020 will be a key year for the accelerated reshuffling and iterative transformation of the blockchain mining industry. The early extensive operating methods will be replaced by professional, financial, and refined operating strategies. In the one to two years after the halving, both upstream and downstream of the mining industry will face reshuffling, but in the long run, the opportunities for the development of digital asset mining industry are far greater than the challenges.