Bitcoin mining has fully recovered from the Chinese crypto crackdown earlier this year, which effectively shut down more than half of the world’s miners overnight.
The recovery is assessed using hash rate, a word that refers to the total computer power of all bitcoin miners. China had long been the core of this business, with estimates showing that it accounted for 65 percent to 75 percent of global bitcoin mining. However, more than half of bitcoin’s hash-rate disappeared from the global network after Beijing essentially banned the country’s cryptocurrency miners in May.
According to data from Blockchain.com, the network had totally recovered its losses as of Friday. In just five months, the network’s hash rate has increased by around 113 per cent.
“Bitcoin weathered a nation-state onslaught of China officially forbidding mining, and the network shook it off,” said Kevin Zhang of digital currency firm Foundry, which assisted in the importation of over $400 million in mining equipment into North America.
Hashrate’s increasing trend may speak well for the world’s most popular cryptocurrency’s price, which has dropped 30% in the last month. According to bitcoin mining engineer Brandon Arvanaghi, who now operates Meow, a startup that facilitates corporate treasury participation in crypto markets, China’s ban was a clear “buy” signal, just as it was with Google and Facebook before it.
But, for Arvanaghi, the most important conclusion from this struggle is that bitcoin mining has weathered its most severe stress test yet with no fuss.
“Six months after surviving an attack by a foreign superpower, the bitcoin network is stronger than ever.” “How can anyone ever say again, ‘But what if governments outlaw it?'” he wondered.
Bitcoin’s rapid resurgence
When half of the bitcoin network went black this spring, many experts predicted that miners in North America would come back online. Many forecasts were made regarding how long it would take to restore the network to its previous peak.
No one CNBC spoke with believed the network would be able to recover by the end of the year.
Marshall Long, a Texas bitcoin miner and engineer who is the head of architecture at Rhodium Enterprises, a fully integrated bitcoin miner with liquid-cooled infrastructure, told CNBC that the rate of recovery astonished him.
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