Bitcoin – a distributed digital currency – doesn’t get created by fiat (government’s order). Instead it is generated via a process called mining that uses computers to perform cryptographical calculations. Just like real world mining, Bitcoin variety is tough, so people form mining pools and contribute their collective computational (also called hashing) power to the pool in exchange for a share in virtual bounty. If you need more information on basics of mining or how to get started, you can read the series Mining Virtual Gold in Canada.
I mine Bitcoin using the largest Bitcoin mining pool - BTC Guild. BTC Guild has a concept of teams, where you can join a group of miners and compete against other teams for fun. The team competition stats give a great insight into important mining statistics in Canada and globally. In today’s post I am making an attempt to crunch these numbers and do a comparison of how well Canada fares in relation to others and what is the composition of mining power inside the country. My analysis makes it perfectly clear – Canada is a Bitcoin mining leader!
Before we dive in, it’s important to mention that while BTC Guild is not the only mining pool out there, it is the largest one according to blockchain.info. Therefore, it’s reasonable to presume that our observations can be approximated to the global mining landscape. I want to stress that this article is not intended to be a scientifically rigorous analysis, but more of an exercise in understanding overall trends in Bitcoin mining and what they mean for Canada.
Numbers used in this post can be found on BTC Guild Teams page, however in order to see detailed stats for a particular team, you need to have a BTC Guild account and become a member of that team.
Canadian Bitcoin Miners vs the World
It is great to see Canada scoring high in comparison to other nations. The total BTC Guild Canadian Team’s hashrate as of the time of this writing has reached about 950 GH/s, which puts it in 4th place globally, closely following team Holland at 952 GH/s. The silver of mining competition goes to team China hashing it out at 1.74 TH/s , and the top one on the list – team “avalon”, pushing amazing 1.86 TH/s.
Another metric that BTC Guild collects is the total number of submitted shares or “proofs of work”. Here Canada wins a silver medal at almost 200 million shares. China has the gold with 250 million shares.
What are some of the reasons behind Canada’s mining leadership? I think it boils down to a few key factors:
- First is the easy availability of high-quality hardware at reasonable prices. One can easily put together a GPU mining rig within a couple of weeks.
- Canada is a country with relatively high per-capita income, which means enthusiasts have money to spare.
- Relatively low electricity rates. In Canada cost of electricity is between 6.3 to 11.8 $US cents per kWh. Compare that, for instance, with Australia, where the cost of juice is whopping 22 to 46.56 $US cents per kWh.
Some things still remain unexplained. Canada is not the only country with easy access to hardware, deep pockets, and relatively low electricity costs. United States would be another example of a country with a favorable combination of mining factors. It’s arguably the richest country in the world. It also has easy access to high-performance computers. Electricity costs are reasonable at 8 to 17 $US cents per kWh. Yet Canada’s mining capacity significantly outperforms that of the US. Think about it, Canada, a country of 35 mln people contributes more hashing power than US, a country with population of over 300 mln people. The only reasonable explanation of this discrepancy is that In addition to the three core factors mentioned above, there are probably be some other considerations that are left unaccounted for at this time.
Canadian Miner Composition
What immediately strikes one when looking at the data, is that Bitcoin mining is very egalitarian. As I mentioned before, the total Canadian hash rate on BTC Guild is 950 GH/s. Out of that, the top 25 miners contribute 905 GH/s, or 95%. This basically means that a very small group of people owns majority of Bitcoin generating power in the country.
|Miner Group||Total Speed (GH/s)||Percent of total Canadian Hashrate||Average Miner Speed (GH/s)||Number of miners (in top 25 range)|
Furthermore, within the top 25, there is a huge gap between the first 2 miners, clocking at over 200 GH/s each, followed by the next 6 in 10-100 GH/s range, and then others who fall within 1-10 GH/s range. In other words, the top two performers contribute combined power of roughly 500 GH/s, or 50% of total Canadian hashrate. Even if we assume for the moment that top 2 miners are not two individuals, but groups of people, we still end up with just a handful of very powerful players. Did somebody say Bitcoin was a democratic currency? Yes, it’s true, it’s democratic in a sense that anyone with a computer can start mining, spending, and trading it, but it’s also clear that we are witnessing the birth of a very small elitist group of people that controls 95% of Canadian supply of digital currency.
I would love to meet the folks behind the top 2 monster mining rigs, undoubtedly consisting of many FPGA and ASIC miners, and talk about their experiences. For them, mining is an “all in” endeavor. My rig is turning a profit each month, but even if it didn’t, I would not feel any significant financial pain. I’d just stop mining for awhile and play Crysis or Bioshock with the awesome 4 x 7950 AMD Radeon GPUs. For me, mining is a hobby. Not so for the top miners. They must have invested tens of thousands of dollars in Bitcoin mining hardware and their monthly electricity bills are in thousands. For them, there is really no way to run these power-intensive mining operations as a hobby. It must be a self-sustainable business that turns monthly profits.
Conclusion – Canada is a Great Place to Mine Bitcoin
Since Canada is one of the top contributors to global supply of new Bitcoins, it’s only fitting that Canadian Bitcoin constituency is elevating up its game by providing a community forum, forming a Bitcoin alliance and running probably the most regulatory-aware Bitcoin exchange in the world. A healthy Bitcoin-friendly ecosystem is a fertile ground for mining-related innovation.
Naturally, I have made my not so insignificant contribution to making sure Canada is a Bitcoin mining leader. After upgrading my GPU rig with the Block Erupter USB miners, I looked at the stats and was pleasantly surprised to discover that I have the 12th fastest rig in Canada at 2.7 GH/s. Even though I can only dream of reaching the ranks of top performers, the chart gives me a clear next goal – the 10GH+ range!