China's leadership in the Bitcoin mining industry will be challenged

If you talk about Bitcoin mining, you have to talk about China.

China has become a giant in the Bitcoin mining ecosystem with major mines and pools, quick, cheap labor and a majority control of the world's hashing power.

Should you go set up a mining operation there? Do the pros outweigh the cons? Is China actually a threat to the Bitcoin ecosystem? Let's look at the state of Chinese mining.

As more miners started turning on and the Bitcoin mining difficulty rose, higher levels of computing power and electricity was needed to solve the equations and reap the reward.

Even though cryptocurrency usage and exchanges are reportedly banned in China and Bitcoin mining was once in danger of being shut down, the government took an about-face and is increasingly embracing the use of blockchain technology in its major industries - and allowing Bitcoin mining to grow.

Bitcoin mining in China is a growing industry because labor costs are cheap, turn-around time is incredibly quick, and lead time and production costs are much lower, since the country is a hub for global trade.

Because Bitcoin mining requires so much electricity between powering the miners and powering the fans to cool the miners, a data center needs to get electricity as cheaply as possible.

The third Bitcoin halving occurred this past May, cutting the mining reward in half and forcing miners to make significant upgrades to their hardware to stay competitive.

With other parts of the world embracing and encouraging Bitcoin mining, and with the greater sustainability offered elsewhere, we may soon see China's place as the giant of the industry challenged.

Philip Salter is the head of mining operations at Genesis Mining, the world's largest cloud crypto mining operation, where he leads the software development, data engineering and research teams.