U.S. becomes largest bitcoin mining centre after China crackdown
According to the Cambridge Center for Alternative Finance, published on October 13, the United States has overtaken China, which accounts for the largest share of bitcoin mining in the world.
The impact of the harsh measures on bitcoin trading and mining initiated at the end of May by the State Council of China or the Cabinet of Ministers, which destroyed the industry and forced miners to close stores or go abroad, is shown in numbers.
According to the data, China’s share of the power of computers connected to the global bitcoin network, known as “hashing speed,” fell to zero in July from 44% in May and to 75% in 2019.
Miners from other countries have taken advantage of this weakness, and platform manufacturers have focused on North America and Central Asia, as well as larger Chinese miners, although this process is fraught with logistical difficulties.
As a result, the data show that currently the largest share of mining is in the United States, about 35.4% of the global hashrate at the end of August, followed by Kazakhstan and Russia.
Bitcoin is created or “mined” by powerful computers, usually in data centers around the world, which compete to solve complex mathematical problems in a process that requires large amounts of electricity.
Low electricity costs in Russia and a cool climate have allowed some companies using excess electricity to benefit from the rise in bitcoin prices earlier this year, but concerns about illegal mining are growing.
In a letter to the government in Moscow at the end of September, the governor of the Irkutsk region, Igor Kobzev, pointed to an “avalanche-like increase” in electricity tariffs, blaming the underground mining of cryptocurrencies. Due to the Chinese authorities’ ban on mining and the movement of a significant amount of equipment to the Irkutsk region, the situation is deteriorating.
Authorities in other countries are more tolerant or even welcome bitcoin mining, while Chinese authorities announced even stricter rules for bitcoin mining and trading last month. According to the representative of the drilling rig manufacturer Ebang International Holdings, the acceleration of compatible mining farms in North America and Europe will be in the near future.
Mao Shihang, founder of F2Pool, once the world’s largest bitcoin mining pool, and co-founder of Cobo, a crypto asset manager, believes that the situation with cryptocurrency leaves much to be desired, and China should pay attention to computing power, otherwise the leading positions will go to the United States.
