China is now home to 4 of the 5 largest Bitcoin mining operations and
70% of the computational power globally.
The Communist Party has recently , however, banned domestic bitcoin exchanges
and in general banned conducting digital transactions between the local currency RMB.
Of course, that does nothing to stop crypto-currency holders from holding
crypto-currencies or exchanging them in U.S. dollars which can then be
transferred into RMB.
Chinese Bitcoin miners have dominated the space thanks to low electricity prices
and low cost engineering.They have also been adapt at modifying computing systems
with access to low cost gaming chips which are efficient for bitcoin mining and
Another key advantage has been the cost of electricity. The average cost in the U.S.
for 1Kwh hr of electricity is around 10 cents. In China, the cost can be less than
1 cent depending on the deal that has been worked out with the local power company.
Many of those deals not all above board.
There are dark skies on the Horizon, however, as Bitcoin miners are actively watching
government interference into the activity. Bitcoin miners have searching out new
locations to set up Bitcoin mining operations in places with access to low cost electricity
such as Russia.