Small mining pools have benefited from the Chinese crackdown. This opinion is shared by analysts at IntoTheBlock.
As Lucas Outumuro wrote on the company’s blog, the mining pools Binance and Huobi have significantly reduced their capacity (by 35% and 63%, respectively), which affected the mining of blocks.
This played into the hands of small or previously unpopular mining pools. For example, unknown mining pools no longer mine 0.03 blocks per day, as it was before the mining ban in China, but more than 10 blocks. The profitability of unknown mining pools has grown by more than 30,000% compared to January.
The shift in profitability indicates that Bitcoin mining is becoming more decentralized, Outumuro notes. Thus, the departure of miners from China solves the threat of a theoretical 51% attack, since 65% of the network hashrate used to be in China.
“Ultimately, bitcoin is in a more stable position than it was at the beginning of the year,” added Outumuro.
Also, IntoTheBlock found out that along with decentralization, the influence of miners on the price of bitcoin also fell. For example, the total activity of miners of the total trading volume fell from 20% in 2013 to 3% in 2021.
The fall of influence, according to Outumuro, due to a decrease in the block reward after halving. So, fees remain low and miners still rely on block rewards. Recall that at the end of May, China announced the fight against cryptocurrency mining in the country. Thus, the authorities are allegedly trying to protect the financial system and at the same time reduce carbon emissions.