China has been one of the great detractors of bitcoin, but what many do not know is that its snub can make its mining easier and even more profitable.
It is estimated that more than 90% of China’s mining capacity has been ‘capped’ by the government. This has a great impact on the cryptocurrency as 65% to 75% of its global mining takes place in the Asian giant.
Mining bitcoins (and other cryptos) involves using powerful computers to solve complex mathematical puzzles that, in turn, generate new bitcoins as a reward if done successfully. This prize is currently around 6.25 bitcoins down from an original 12.5.
Crypto experts agree that after China has shut down many mining operations, the rest can benefit from this by taking their share of the pie. “As the ‘hashrate’ falls, the difficulty will be adjusted downwards and the miner in question will receive an even greater reward,” said Kevin Zhang, vice president of the crypto mining company, Foundry, in statements to CNBC.
Another key factor in determining the profitability of mining crypto is its price, and the current price of bitcoin which is much higher than in previous years does not help that much in what miners are concerned, acting as a drag on the potential profit that can be obtained.
Translated by Caoimhe Toman