The massive mining ban in July had a profound impact on the mining industry because after the ban, the Bitcoin network lost more than 50% of its hash rate.
Such a spillover effect is because miners from other parts of the world get an edge, and the distribution of hash power strengthens the security of the network.
No more China with Bitcoin
After the ban was announced in April, the Hash Rate immediately dropped from 197 million steps to as low as 61 million steps. When miners were forced to close their mining operations in China, they moved elsewhere.
The dent created by their departure took 9 months to be fixed, and finally yesterday, Bitcoin’s hash rate marked a new all-time high of 215 million terra hashes. This speaks to much of the soul of Bitcoin, i.e. decentralization, where over 140 million T/hs of miners have returned uncoordinated.
Bitcoin hash rate | Source: Glassnode – AMBCrypto
Furthermore, it ultimately washed Bitcoin away from its claim of Bitcoin’s dependence on China, as today that country has no dominance in this space and the network continues to grow.
This also appeared at the same time as Block notification their intention of developing a more efficient and distributed mining method by focusing their efforts on the biggest problems faced by miners – Availability, Reliability and Performance.
Therefore, the entry of more public companies like Square in the mining industry will help to better understand and predict the future of the mining industry.
According to data from Galaxy Digital, currently only 18% of the total hashrate is represented by public companies. This number is expected to grow to 40-45% by the end of 2022 based on increased orders of mining ASICs this year.
ASIC ordered for 2022 | Source: Galaxy Digital
Considering other factors as well, the report estimates the hash rate will hit an average of 335 million terra by the end of 2022.
Expected hash rate by the end of 2022 | Source: Galaxy Digital
Hence, this moment is a turning point for Bitcoin mining as today’s network is devoid of any hegemony from China and is truly decentralized in all respects.