- 3 February 2020
- Posted by: btcbros12
- Categories: Articles, Bitcoin, Blockchain, Cryptocurrency, mining, Technology
China is the undisputed leader when it comes to cryptocurrency mining.
Chinese mining pools control over 70% of the bitcoin network’s collective hashrate. China manufactures most of the world’s cryptocurrency mining equipment. They also house massive mining farms. China has been able to dominate the global markets when it comes to cryptocurrency mining. Chinese exchanges have to lead the world in terms of volume. Their closest competitor only has 4% control over the global network’s collective hashrate.
There are several factors that come into play when it comes to the cryptocurrency market. So what is it that allows China to be so far ahead?
How does Crypto Mining Work?
Cryptocurrency mining, or cryptomining, is a process wherein transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger.
Typically, mining involves individuals using their computer’s processors to “mine”. This means that individuals will have to use their computer to solve complex mathematical equations that tend to heavily task computers. Solving these can be quite task as it depends on multiple factors like:-
- Graphical Processing units (GPUs)
- Applications specific integrated circuits (ASIC)
- Sufficient system cooling methods
- 24*7 internet
- legitimate cryptocurrency mining software
- Memberships in exchanges as well as mining pools
It is not a guaranteed method to earn money, however, as there are a lot of overheads that are included. It does take a lot of effort and a good amount of time to actually mine so it is definitely not for everyone. There are options where individuals can outsource mining, but this tends to take some time to break even.
How is China Dominating the market?
China is the undisputed leader in global cryptocurrency mining. There are several factors that allow China to be where it is.
- Cheaper electricity: Mining needs a lot of electricity. Electricity is an overhead that must be considered when it comes to crypto mining. This is because mining gear tends to draw a lot of electricity as mining is quite an intensive task. China, however, has cheap electricity. Their environmental laws have been rather lapse, though this is changing, and with an abundance of coal, electricity is pretty cheap. This goes a long way when it comes to mining. With cheaper electricity, more systems can run simultaneously without a care for the overhead charges due to electricity.
- Equipment is cheaper: China is a haven for technology. One can find anything for much cheaper prices in China than anywhere else. With improved technology being more accessible and even well-functioning used gear being sold at cheaper prices, mining is accessible to everyone.
- Mining Pools: Mining pools are groups of cooperating miners who agree to share block rewards proportionally to their contribution to mining hash power. China has the most mining pools in the world. This means that a huge chunk of the global network hashrate is mined in China. This alone ensures that they have the most crypto mined internationally.
Ultimately, China is a powerhouse when it comes to crypto mining. They have several benefits because of the characteristics of the nation itself and this ensures that they dominate the crypto mining world.
We hope you enjoyed reading this article! If you did, please feel free to like, share or comment below. Thank You!
You can find some interesting mining links here!
We are now also on YouTube! Head over to our channel and subscribe, to watch interesting and informative videos on the Cryptocurrency and Blockchain industry.