In a previous announcement, Jiang Zhuoer, the operator of one of the most famous Chinese mining pools, Lebit Mining, stated that his company will no longer provide joint mining services to Chinese investors due to the officials’ increasing ban on Bitcoin mining. In addition, the operator stated that they plan to relocate to North America. He explained.
Mining in China may change from large to family miners, even if it causes 50% of the mining machines to fail to operate, there is no problem for the Bitcoin system. But the top mining pools may become European and American mining pools.
To meet the central government’s zero-carbon commitment, Chinese authorities have begun a ban on digital currency mining operations in the nation. Given the fact that the cost of building up a mining pool in the United States is almost ten times higher than in China, major Chinese mining pools are preparing to relocate abroad in the face of increasing regulatory pressure. Since the mining sector is unregulated, it is much less expensive to work in remote areas.
Why is China the epicenter of digital currency mining?
China is home to some of the world’s biggest hydroelectric plants and solar energy ventures, which provide renewable energy at a low cost. As a result, although Bitcoin and crypto trading is relatively limited, mining is still very prominent, with China accounting for the majority of the Bitcoin network’s hash power. State bans are nothing new, but climate neutrality plays a major role in government policies, and Bitcoin mining in some regions has resulted in the government failure to reach its greenhouse gas emission targets.
Although the Chinese government’s ban on Bitcoin and Bitcoin mining is not unprecedented, it appears the government is taking a tougher stance this period. Large Chinese mining pool operators claim large-scale mining would cease to exist in the region, leaving only small miners to operate from their homes.
Many Bitcoin supporters see the Chinese regulators’ ban on large-scale miners as good news since it would contribute to further decentralization of the Bitcoin mining hash power.