Crypto miners are looking for ways to escape from China to Europe and North America.
Chinese authorities have been making efforts to end cryptocurrency mining in the country since this year. As a result of all the bans that came, the USA got ahead of China and became the world’s main source of bitcoin mining with more than 1/3 of the global hash rate. On the other hand, the USA is followed by Kazakhstan and Russia. Also, most bitcoins are mined by large companies that run their own data centers.
China held about 75% of the global bitcoin hashrate in September 2019, according to figures released by the Cambridge Center for Alternative Finance. As the Bitcoin price continues to rise rapidly in the recent period, large mining data centers are being established in different countries, including the USA, Kazakhstan and Russia.
China’s share fell to 44% this April. After pressure from the authorities in May, the decline continued. China banned all illegal cryptocurrency operations in the country in September, greatly reducing interest in cryptocurrencies in the country.
In contrast, the US’s share of the global hashrate rose from 17% in April to 35% in August, while Kazakhstan’s share rose from 8% to 18% in the same period. Russia is just behind Kazakhstan with a share of 11% as of November 2020.
Some crypto companies in the US have even purchased non-operating coal-fired power plants to feed their farms. Meanwhile, Kazakhstan began to suffer from electricity shortages due to miners from China. The Kazakhstan government has even passed a special crypto tax that will come into effect next year to get its share of cryptocurrency mining.
900 Bitcoins per day
Thiel estimates that around 900 bitcoins are mined each day. Earlier this year, it was revealed that bitcoin mining consumes more power than countries like Argentina or Ukraine, where about 45 million people live.
It seems financially logical to mine bitcoin and other cryptocurrencies in countries with cheap energy. Unfortunately, the cheapest energy comes from power plants that run on coal and other fossil fuels, which tend to pollute the atmosphere.