Go West, Bitcoin! Unpacking the Great Hashrate Migration
All signals indicate the greatest shakeup in the geographic makeup of bitcoin mining since the start of the industrial mining era.
By now, it should be clear the “hashrate migration” is real: Miners are leaving China for good. As of April 2020, an estimated 65% of bitcoin hashrate was domiciled in China; with confirmed bans across the country, that figure will be far lower 12 months from now. The precise magnitude and schedule for the westward move is currently unknown, but all signals seem to be indicating the greatest shakeup in the geographic makeup of bitcoin mining since the start of the industrial mining era.
Hypotheses for the motivations behind China’s move to eliminate mining abound, although no single explanation appears sufficient as of yet. One obvious explanation would be a desire to meet climate targets and reduce emissions. But this is contradicted by China’s continued embrace of coal power (it added three times as much in 2020 as the rest of the world combined) and that the crackdown extended to hydro-powered regions like Sichuan.
CoinDesk columnist Nic Carter is partner at Castle Island Ventures, a public blockchain-focused venture fund based in Cambridge, Mass. He is also the co-founder of Coin Metrics, a blockchain analytics startup.
