Data from Blockchain.com shows that the Bitcoin network’s hash rate has recovered to levels not seen since China banned mining in the country back in May. Between May and July, the hash rate plummeted before rising again as miners moved their operations.
The hash rate is important because it shows how much computing power is performing Bitcoin mining. Miners have their computers performing intensive work and if they’re lucky, they receive a Bitcoin payout. Part of the miners’ work also involves processing transactions. When there’s a backlog of transactions, the price for transferring Bitcoin can go up so with the hash rate increasing, fees should be lower than earlier in the year.
One of the big criticisms levelled against Bitcoin and other proof-of-work crypto networks is that they use too much energy and are therefore speeding up global warming. When miners were operating in China, where the biggest energy source is coal, the argument was potent. However, with mining shifting to places like America where coal is used to a lesser degree, the argument has less weight.
According to the Cambridge Bitcoin Electricity Consumption Index, the countries that have picked up the most slack from China’s mining ban are the United States and Kazakhstan.
With Kazakhstan becoming the second biggest country for Bitcoin mining, it has caused domestic energy prices to increase and the country’s president has proposed the construction of a new nuclear plant. On another occasion, President Tokayev said that the country doesn’t see many financial returns for the mining that goes on there so he could try to capitalise on it in the future.