Bitcoin mining is a process that both adds transactions to the cryptocurrency blockchain ledger but also unlocks new Bitcoins into the system. The process involves using computer power to solve complex mathematical puzzles. Bitcoin mining is an essential process in Bitcoin security – the complexity and effort makes the cryptocurrency system less vulnerable to attack.
What is a Mining Pool?
Mining is now predominantly executed in large, specialised warehouses with huge amounts of mining hardware – hashing power is typically directed towards mining pools in these venues. Mining pools are groups of miners who work together to mine, under the agreement that they will share block rewards when they are unlocked. The rewards are allocated in proportion to the contributed mining hash power of each member of the pool.
Which countries have the most Bitcoin miners?
The process of mining for Bitcoin has become so complex that the amount of computer power, and as such electricity, required in mining has become sizeable. Therefore, the largest numbers of bitcoin miners, geographically speaking, can be found in countries where not only is new technology highly prevalent but also where access to cheaper energy resources is available. Therefore, mining tends to gravitate towards countries with cheaper electricity.
Further to this, in each country, the top handful of mining companies have harnessed a large amount of network hash power in their mining efforts – creating a more centralised structure of the mining process. There are only a few countries that can boast of a concentrated mining effort. As such, only a few countries are able to sizeably export bitcoins.
Based in Georgia, BitFury is a company known for being one of the largest players in the Bitcoin mining business segment – developing and selling efficiency streaming hardware to Bitcoin users and businesses. Bitfury is one of leading full service Blockchain technology companies and one of the largest private infrastructure providers in the Blockchain ecosystem. As such, as of 2016, BitFury was mining about 15% of all bitcoins.
China mines the most bitcoins of any nation and therefore also exports the largest number of bitcoins. This has been driven, in part, by cheap electricity – Chinese Bitcoin miners have gained an advantage by capturing a large percentage of Bitcoin’s hash power. Most, and indeed some of the world’ largest, mining pools are based in China.
As home to 21 Inc., one of the largest Bitcoin mining companies across the globe, the United States has become one of the highest bitcoin mining countries. Based in California, 21 Inc runs a huge mining effort whilst selling low powered bitcoin miner solutions as part of their 21 Bitcoin computer product. The majority of 21 Inc’s hash power is pointed towards 21 Inc’s mining pool and as of 2016, 21 Inc mines about 3% of all bitcoins.
Smaller mining pools are operating the world over – which cumulatively make up a far smaller part of the Bitcoin mining endeavour. The remaining hash power is spread across the globe – with only approximately 20% of all bitcoins mined taking place outside of the countries listed above.