The United States took over from China and became the newest bitcoin (BTC) mining hub in the world. Data released on Wednesday (13) by the Center for Alternative Finance at the University of Cambridge show that the country is already responsible for most of the global hash rate in cryptocurrency mining.
The new data revealed that Beijing has actually managed to drive most of the country’s bitcoin miners out of the country as bans on the cryptocurrency market grow. Thus, with a completely opposite policy, the United States was successful in attracting these companies with the offer of cheap electricity and subsidies.
US already accounts for 35.4% of bitcoin mining
As reported by the Cambridge University Center for Alternative Finance bitcoin mining map, the latest data (as of July 2021) simply counted China’s share of the global hash rate as nil. Meanwhile, the United States has doubled its percentage.
In September 2019, China dominated cryptocurrency mining, accounting for 75% of the global hash rate, the highest percentage ever recorded. However, this share was falling throughout 2020 and 2021.
In May this year, the country was still leading the mining map, but with a 44% share. Within a few months, miners appear to have completely abandoned China, which in July had a 0% share of the global hash rate.
The United States quickly rose to the top position. In the same month, the country already accounted for 35.4% of cryptocurrency mining, followed by Kazakhstan and Russia, with 18.1% and 11.2% of participation, respectively. As the new data refer to July, the American percentage is expected to grow even more throughout 2021.
Bitcoin miners are attracted to cheap electricity
Bitcoin mining requires high-powered computers to stay on 24 hours a day competing to solve complex mathematical processes to maintain the cryptocurrency network. Given the high energy consumption of the activity, miners are always looking for cheaper electricity to maximize their profits.
Therefore, China ended up becoming the biggest cryptocurrency mining hub by offering low-cost energy, mainly generated by coal plants. Now, these miners are turning to countries that can offer the same profit potential.
In the United States, nearly bankrupt fossil power plants are being bought and restarted by bitcoin miners. Kazakhstan and Russia also have an ample supply of cheap electricity from burning coal.
A representative of mining platform maker Ebang International Holdings told Reuters that, after the latest Chinese crackdown, the company’s focus has shifted to “building compatible mining farms in North America and Europe”.
“As a veteran who witnessed the birth of the industry in China, I feel the situation today is regrettable,” said Mao Shihang, founder of F2Pool, which was once the world’s largest bitcoin mining pool, and co-founder of Cobo, responsible for a digital asset of the same name and based in Singapore. “China is losing its share of the hash rate… the industry pole is now shifting to the United States,” added the executive.
With information: Reuters