US Claims 1st Place in Bitcoin Mining as Chinese Miners Migrate Abroad
US Claims 1st Place in Bitcoin Mining as Chinese Miners Migrate Abroad
The USA currently controls 35% of bitcoin mining compared to 4% two years ago!
As the price of bitcoin rose to over $19,000 in 2017, eyes in China turned towards mining.
It definitely didn’t hurt that the country had a surplus in electricity supply equivalent to Switzerland's total energy production!
Let the Mining Begin
At one point, two mining facilities in China were responsible for 30% of bitcoin mining.
Sichuan province in particular became known as the global Bitcoin mining capital.
Over 10,000 miners were located in the region.
The province’s cold weather helped cool down the equipment.
electricity companies got into the game due to a surplus in supply.
When electricity prices increased in Sichuan, miners would simply drive their equipment to another place with cheaper electricity.
The electricity consumed by bitcoin mining reached levels similar to Belgium’s entire power consumption! To make the matter even worse, many miners used electricity produced by coal plants contributing to a rise in demand for coal.
The Ban
Even though China banned bitcoin trading in 2017, mining was still welcomed by most provinces since it brought in tax money. However, last May, the country announced a crackdown on bitcoin mining. The government had several reasons for its decision.
Bitcoin could compete with the sovereign cryptocurrency, the digital yuan.
An unregulated currency undermines the government's control over markets.
Bitcoin was directly tied to a rise in illicit coal extraction.
The New King in Town
After the ban, mining companies had to find a new home for their operations. Many chose the US.
Last June, Texas became the second state after Wyoming to recognize blockchain and cryptocurrency in its commercial law.
This drove many Chinese companies to move to the state. Other states have also benefited from the ban.
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