Bitcoin arms race begins when new Chinese mining group causes a stir

Last week, there was talk of a new China-based Bitcoin mining group making waves in the mining industry. Out of nowhere, in what is already a very competitive market, Lubian has become the seventh largest group.

Data shows that they are responsible for the treatment of almost 6% of Bitcoin blocks. But what is particularly unusual is the short time that they have accomplished this feat.

Lubian has already launched Huobi-pool, the mining arm of the fourth largest crypto exchange, which has existed since March 2018. And most surprisingly, Lubian has gained ground on the Binance Pool, which was launched in the end of last month.

Bitcoin halving sees changes in mining dynamics

As the dust collects in half, we have already seen significant changes in the mining dynamics of Bitcoin and how it affects the rest of the industry.

To begin with, after the block cutting awards, the Bitcoin hash rate It took a hit because unprofitable miners are forced to close their platforms.

In addition, this led to a higher concentration of miners, which in turn caused additional congestion on the Bitcoin network.

An unintended consequence of this has been the increase in transaction costs. In the present, average transaction costs

it peaked at $ 5.20 after half. Since then, this amount has been brought down to $ 3.44, but it remains significantly higher than the previous half-rates per transaction.

While the increase in transaction fees can compensate for the loss of revenue from block rewards, the downside is that Bitcoin becomes less attractive to users, who already hate paying high fees to send their own Bitcoin.

With this, the likes of Bitcoin Cash and Bitcoin S.V can win. Both projects have already seen an increase in their hash rate, suggesting that unprofitable miners switched to BCH and BSV mining.

As such, the result of halving has only condensed energy in the hands of those who have the resources to compete at the highest level. Which in turn does little to deny claims that Bitcoin is a centralized network.

Lubian enters the fray

However, that didn't stop the emergence of Lubian who is trying to take advantage of Bitcoin mining. A look at her statistics shows that they were responsible for the extraction of 56 blocks last week with a hash rate of 6.44 PE / s. In comparison, the core group, F2Pool, made 163 blocks and had a hash rate of 18.74 PE / s.

As impressive as it is, especially for a newcomer, details of who is behind this operation are scarce on the ground. A look at her website it shows nothing remarkable, which only intensifies the mystery.

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In addition, the rise of Lubian suggests that the company may have a hidden advantage over other groups. One possibility is that Lubian is using new mining equipment, which the other groups have not yet realized.

Although this is pure speculation right now, how can you explain its mining efficiency?

This turn of events occurred when the market leader in mining equipment, Bitmain, suffered again. Just two weeks ago, the power struggle between Jihan Wu and Micree Zhan escalated into a public conflict involving the theft of a business license from a Beijing government office.

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With so much turmoil at Bitmain, it is clear that the company is not focusing on product innovation. Which means now is the time for competitors to steal equipment.