China would not issue new restrictions against Bitcoin, according to the executive.
The company has no plans to migrate hash rate to Paraguay or El Salvador.
Bitcoin (BTC) mining is an issue that transcends the cryptocurrency industry. Current political, technological and even energy consumption issues make it a topic of debate in the most varied scenarios. China has historically dominated the processing power of the network, a situation that still continues, but with less superiority than before.
Restrictions imposed on miners by the Asian giant are changing the distribution of the hash rate on a global scale. A sort of unannounced “cold war” is now taking shape with the United States, a country that is attracting more and more miners to its territory.
It’s no longer just miners themselves or techgeeks talking about it, now it’s from business leaders to heads of state. Mining bitcoins is more than a process of transfer validation or solving blocks in exchange for payment, it is an economic activity that is increasingly being recognized by countries.
In order to get some thoughts on these and other issues, CryptoNews contacted Haipo Yang, CEO of the mining pool ViaBTC, the second largest mining group in the world. The executive believes that China’s restrictive policy towards mining will change in the future and that it will end up adopting it as part of its productive activities.
Haipo Yang, CEO of mining pool ViaBTC. Source: Courtesy Haipo Yang.
Bitcoin mining is reconfiguring geographically, what is your reading of this new hash rate
Due to political reasons, the global hub for Bitcoin mining is shifting from China to the United States. The largest migration of miners in history has directly led to the geographic redistribution of the Bitcoin hash rate. It can be seen from the location of the miners that the migrated hash rate
is mainly distributed around North America and Central Asia.
Judging by the areas of each country, the hash rate is generally distributed around the United States, Kazakhstan, Canada, Japan, and the United States.
dá and Russia. This result did not happen by chance, but largely reflects the environment, policies, energy infrastructure and miner-friendliness in these countries and regions. We believe this reality will have a major impact on Bitcoin mining in the near term, as evidenced by the 100 EH/s drop in hash rate
In the global distribution of Bitcoin’s hash rate
, China has a decreasing weight, while North America and Central Asia are gaining momentum. However,
in the long run, this is good news, because it has also made Bitcoin’s hash rate
more decentralized. In the last 30 days ViaBTC accumulated 13% of the hash rate of the entire network with 616 mined blocks. Source: BTC.com
Do you think China might further restrict cryptocurrency-related activities?
China is steadily moving forward with reform for the commercialization and legalization of its financial system. To avoid major systemic risks
, some measures are necessary. Thus, we can see that China has issued a series of risk warning announcements about cryptocurrencies and has also taken corresponding measures in its territory.
However, we don’t think the government will issue stricter regulatory policies on emerging cryptocurrencies. So the recent policy is more of a temporary risk aversion attempt than a ban. After the government puts in place corresponding effective regulatory measures, it will loosen its control in this field.
That’s exactly what has happened with the Internet in China over the past two decades, as the country eventually inevitably embraced the new. It’s only a matter of time, and we have full confidence in this industry.
Is ViaBTC moving its operations or part of its operations out of China? If so, where to?
I don’t think we are “moving our operations out of China”, but actually “embracing the world”. In fact, our internationalization strategy has been progressing. Already two years ago, ViaBTC started to focus on foreign markets.
Today, it has footprints all over the world, with only a small proportion of hash rate in China. The most telling evidence is that ViaBTC’s hash rate
has remained stable and even gone up for a while in the midst of the “miner migration wave”.
Just contrast that with the major mining pools whose Bitcoin hash rate
has been plummeting. In the future, we will deepen our internationalization strategy to serve more users.
There are those who claim that this situation will favor the decentralization of mining. C
hat is your point of view?
In reality, the question of “decentralization” is nothing more than a trade-off between opportunity and fairness. Many in the industry like to focus on the geographic concentration of the hash rate
to denounce the Bitcoin mining sector as “concentration of power” and “violation of the decentralized spirit”.
However, there is no such thing as absolute decentralization or fairness. “Decentralization” turns out to be a false proposition, because neither PoW consensus nor PoS consensus mechanism
can ensure 100% decentralization. Therefore
, it is of little significance to discuss it.
Would ViaBTC consider establishing part of its operations in Latin American countries such as Paraguay or El Salvador?
Our considerations in this regard depend more on the local market demand and the suitability of the local industry. We have noticed that the cryptocurrency industry in some Latin American countries and regions has been active since 2021. As ViaBTC is moving forward with its internationalization strategy, its products have covered the markets in the aforementioned regions.
What do you think about the questioning there is regarding the energy use of Bitcoin?
In recent years, global warming, melting icebergs, carbon emissions and energy consumption have caused a lot of concern in all countries, especially regarding Bitcoin mining.
Many people take advantage of these issues to make a fuss. However, according to some data, the Internet’s carbon emission is much higher than Bitcoin’s, and will account for more than 20% of the world’s total by 2030. This reality is ignored by these critics because the Internet has been integrated into all areas of life and has been widely applied.
At present, the entire field of cryptocurrencies is in its infancy, and experts are still exploring possible application scenarios. Therefore, it is inappropriate to compare Bitcoin mining to those fully developed industries. Clean energy
is an important trend that everyone is exploring and will be a good way for Bitcoin mining to maintain its development. China still remains the country with the highest concentration of processing power for Bitcoin mining with 46% of the hash rate. Source: cbeci.org.
What do you think are the advantages or disadvantages of the PoW mechanism over PoS?
Both PoW and PoS are currently the two most widely used consensus mechanisms with the highest degree of consensus. In relative terms, PoW was born earlier and has been tested more, so it has gained more consensus in the industry. Its decentralization and security are better, but its only shortcomings are the following.
The key factors are scalability and energy consumption.
According to Bitcoin’s energy consumption data, carbon emissions from mining are 66.06 Mt, which is equivalent to Israel’s annual figure; the electricity consumed in this process is 139.06 TW/h, which is around the level of Ukraine. The striking carbon emissions and energy consumption also put Bitcoin, the representative project of the PoW consensus, at the center of criticism.
Compared to PoW, PoS is not as decentralized, but it is more scalable and environmentally friendly. Overall, both have their advantages and disadvantages, so we can’t jump to a hasty conclusion about which is better, but base our judgment on concrete circumstances.
What is your opinion on the use of renewable energy for cryptocurrency mining?
We have to face the fact that we are only in the infancy of the cryptocurrency industry. The cumulative carbon emissions and cumulative energy consumption of Bitcoin mining are already comparable to the annual size of a country.
In fact, it’s a headache for many countries. Let’s imagine that one day miners can accept the use of clean energy for mining, and at that time, Bitcoin mining will no longer be accused of environmental damage and will even be accepted by more environmentalists, a big step towards its sustainable development and compliance.
Therefore, we believe that using clean energy to mine Bitcoin will be a boon to the industry in the long run.
Traditional industries are embracing the cryptocurrency field, does this mean that new miners have fewer opportunities?
Traditional industries are encroaching on the cryptocurrency field, good news for the industry in the long run. We don’t think it means fewer opportunities for new miners. On the contrary, it shows that more and more people are optimistic about this industry, and that more potential will be unleashed, thus providing more opportunities for all miners.
This result is evident, as the steady influx of institutions and capital will bring miners more support services in this field. Just look at what has happened to the Internet over the past two decades before the current prosperity, and it will be clear what development trend and opportunities await the cryptocurrency industry.