The Crypto Weekly – October 25th, 2019
<Bitcoin Mining War>
The fact that Chinese mining companies dominate more than 50% of the Bitcoin hashrate is making US institutional investors reluctant to directly invest into Bitcoin. To address these concerns, US capital is beginning to take action, with US mining company Layer 1 attracting USD 50m from investors such as Peter Thiel and Digital Currency Group. Layer 1’s mission is to gain market share from Chinese companies like Bitmain, increasing the U.S.’s share of Bitcoin’s hashrate from just under 5% to 15%, and likely making Bitcoin a multi trillion-dollar asset class in the process. Meanwhile in August, Blockstream, which is based in North America, announced plans to contribute to the decentralization of Bitcoin mining via launching its own service and has secured Fidelity as a client. In addition to private companies, Iran and Venezuela are even considering legitimizing Bitcoin mining at the national level and may even allow their central banks to hold the asset. As Bitcoin’s mining competition intensifies, the hashrate and difficulty of mining will increase, and Bitcoin’s scarcity will be highlighted around the upcoming May 2020 halvening.
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