As is well known, the Chinese anti-Bitcoin campaign has undoubtedly caused many disturbances in the Bitcoin network as miners were forced to shut down machines and move from China to other regions to continue their business.
The nationwide ban on mining has had repercussions.
With more than half of all bitcoin miners in China at the time, the bitcoin hash rate dropped more than 60% to a one-year low in June.
After about two months, the situation has changed and the hash rate has increased by almost 100%.
China causes turmoil in the Bitcoin network:
The hash rate (computing power) is an important security measure on the Bitcoin blockchain.
An increased hash rate means greater security, so the network is more resilient to attacks and vice versa.
In July, the Bitcoin network experienced a shortage of miners which in turn led to four consecutive negative mining adjustments for the first time in nearly ten years.
According to Satoshi Nakamoto’s design, the Bitcoin protocol adjusts itself to be more difficult or easier every 2016 blocks depending on the number of miners and computing power on the blockchain at the time of modification.
But that was not all.
Another report confirmed that at the height of the Chinese crackdown, the Bitcoin network experienced the slowest block production in history, and miners lost a significant portion of their revenue.
During this period, fewer coins were mined than usual, and in addition, miners’ revenue fell from an all-time high of $70 million in May to $13 million in June, which is a drop of 80% in a month.
Bitcoin hash rate doubled:
The mining sector has begun to recover from Chinese repression.
Many miners have already migrated to other friendly regions such as Europe and the United States to resume their operations.
Thus, they reduced China’s dominance in this area and made the Bitcoin network more decentralized.
So far, the hash rate has doubled since its lowest level in June 2021.
Other key metrics on the Bitcoin blockchain, such as mining revenue and difficulty, are also recovering from their decline.
Mining difficulty, which fell to multi-year lows under 14T in late July, is now at 17.6T after three consecutive positive adjustments.
However, the measure is still far from declining since the highs recorded in May 2021.