Report: Bitcoin computing power is becoming "decentralized", and China's share of Bitcoin computing power has dropped to 50%

According to BlockBeats, digital asset consulting firms BitOoda and Fidelity recently released a very enlightening report that attempts to analyze the mining outlook in terms of total energy consumption, energy costs, deployed mining hardware, and the geographical distribution of hash rates.

The report has an interesting number: China's hash rate is currently about 50%. For many years, the proportion of Bitcoin hash rate quoted by the Chinese public has been hovering between 60-65%. Now that this number has dropped, it means that Bitcoin mining is becoming more decentralized, which helps Bitcoin's basic value proposition. The report shows that the United States accounts for about 14% of Bitcoin hash rate.

The report briefly explains the source of the data: the investigation team used various public resources and confidential conversations with miners, mining machine manufacturers and traders to assess the location of mining farms where Bitcoin mining is carried out, as well as the price paid by miners for electricity. The team found about 4.1GW of electricity in 153 mining farms, of which 67 mining farms had a power capacity of about 3GW. Some miners provided electricity price data under anonymous conditions.

BitOoda believes that the information obtained from its survey interviews shows that the United States, Canada, and Iceland account for the majority of capacity, but only a small amount of capacity is in China and "the rest of the world." In discussions with miners, BitOoda asked about their own capacity, and also asked how many other miners they knew in the market, and what they thought the total capacity in the region was. BitOoda believes this is a useful way to estimate the overall geographical distribution of mining capacity in a region.

Analysis of the information obtained in the above manner shows that the cost curve estimates the median cash cost of mining one BTC to be approximately $5,000, with an upper confidence limit of approximately $6,000. This estimate is a cash operating expense and does not include depreciation or other expenses for mining hardware.

Based on more data and investigations, BitOoda believes that the Bitcoin network hash rate could reach 260EH/s within 12 months and 360 EH/s within 24 months. However, according to the BitOoda model, this is somewhat dependent on Bitcoin's price appreciation or expected appreciation at a rate of 25–35% per year.

Interestingly, BitOoda predicts that if the Bitcoin price appreciates steadily at a rate of more than 40% per year to around $19,000 within two years, then even at an electricity cost of 5c/kWh, the latest S19 series miners currently on the market will still be viable, but the total funding gap for the entire industry will reach approximately $4.1 billion in terms of capital expenditure requirements and cash flow generated within the network.

Note: Bitcoin mining is a very secretive industry. Many mines or miners are not easy to find, especially in China, where most mines are still unknown. Miners are widely distributed around the world. The author of this article also emphasizes that the data used has its own limitations, so it may not represent the overall situation of the current mining industry. This article is only for discussion and learning, and the data is for reference only.

Original article address: https://medium.com/@BitOoda/bitcoin-mining-hashrate-and-power-analysis-bitooda-research-ebc25f5650bf

BlockBeats reminds that according to the document "Risk Warning on Preventing Illegal Fund Raising in the Name of "Virtual Currency" and "Blockchain"" issued by the China Banking and Insurance Regulatory Commission and other five departments in August 2018, the general public is requested to look at blockchain rationally, not blindly believe in the exaggerated promises, establish correct monetary concepts and investment ideas, and effectively enhance risk awareness; any clues of illegal and criminal activities discovered can be actively reported to the relevant departments.