Despite banning cryptocurrency trading and initial coin offerings in 2018, and threatening to crack down on cryptocurrency miners in 2019, Chinese Bitcoin miners have controlled the majority of the Bitcoin hash rate since 2016.
Since cryptocurrency miners are directly tasked with securing the Bitcoin network and generating newly minted Bitcoin, any entity with the majority control of the hash rate also has a strong say about the network and its rewards are governed.
According to a map produced by the University of Cambridge Centre for Alternative Finance, miners in China currently control around 65% of the average monthly share of the total Bitcoin hash rate. That’s significantly higher than in China’s three nearest competitors: the United States, Russia, and Kazakhstan—each of which currently controls just 6-7% of the average Bitcoin hash rate.
China dominates Bitcoin mining industry
This isn’t a recent change either. China has dominated the Bitcoin mining industry since its earliest days, as Bitmain and Canaan Creative—two of the earliest movers in the ASIC mining industry—both got their start in China.
Because of this, the barrier to entry for mining in China has always been much lower than in the rest of the world. Chinese consumers are able to avoid the taxes and duties that come with shipping ASIC units abroad, while also benefiting from earlier access to newer generation mining hardware.
Combined with comparatively low energy costs in China, it’s made the country a hotbed for cryptocurrency mining which has manifested in the dominance seen today.
Could Chinese miners launch a 51% attack on Bitcoin?
Since Chinese miners control almost two-thirds of the Bitcoin hash rate, it’s safe to say that they have majority control over around two-thirds of newly minted Bitcoin. Because of this, if almost all of the miners operating in China decided to launch a 51% attack against the Bitcoin network, the odds are high it would succeed. However, such…