The United States now wears the crown as the largest bitcoin mining nation in the world.
China previously held the spot, but they’re now dethroned after their crypto production share dropped to zero following crackdowns on digital currencies.
Data published by the University of Cambridge shows that China’s “hash rate” — the computational power needed for bitcoin creation — fell from 44% in May to zero in July. In 2019, the country accounted for three-quarters of the global hash rate, with bitcoin from China dominating the global supply.
The US now has the most prominent global share of bitcoin mining at 35.4%, a significant increase from only 4.2% just a year ago. The data shows Kazakhstan follows the US at 18.1%, Russia at 11.2%, and Canada at 9.55%.
The great mining exodus
China’s cabinet banned cryptocurrency trading and mining in May, citing financial and environmental concerns. This led to an exodus of miners looking for crypto-friendly locations and cheap energy.
The ban and crackdown have seen a mass exodus of miners as they scramble to find new homes in what is being described as the great mining migration. It has also led to an increased geographic distribution effect of hash rates worldwide.
Following the ban, miners in other parts of the world enjoyed a minting spree of digital coins as competitors from China struggled to relocate their operations. Around 900 bitcoins are mined daily by machines racing to solve complex mathematical and computational problems for unlocking new digital coins.
Bitcoin mining
Bitcoin mining involves the creation of new bitcoins. If you want to mine bitcoin, you have to use high-powered computers to verify virtual coin transactions. Bitcoins operate on what is called a blockchain. Think of it as a public ledger containing every transaction’s history.
The miners’ work is to solve complicated math problems using computers and add new blocks to the chain. In turn, they profit by being rewarded with digital tokens. The systems and rigs used for these endeavors consume enormous amounts of power, usually in abundance cheaply in China.
Chinese miners have had to settle in new locations, especially in some areas of the US. Texas is seen as very attractive for miners looking for cheap and even renewable energy. Other miners from China have settled in Kazakhstan, but roadblocks are imminent for the crypto hunters in their new homes.
Cryptocurrency tax provisions may prompt miners to reconsider the US. Kazakhstan has also passed a crypto mining tax that comes into effect in 2022.
