After China rolled out its strict crackdown on cryptocurrencies, the U.S. has taken the lead in the Bitcoin mining industry and this trend does not seem to be stopping anytime soon.
Crypto mining firm Bit Digital’s Chief Executive Officer, Bryan Bullet, said “I foresee the U.S. continuing to play a leadership role in terms of share because of the jurisdiction,” adding “Nobody wants to operate in a region where they face existential risks,” he added.
The Bitcoin network’s hashrate has recovered from lows that were experienced in July, even after China’s ban forced miners to shut down their operations in the region. The Bitcoin network’s hashrate has risen about 117% as of Oct. 12 from its July low.
The new report from Cambridge Centre for Alternative Finance (CCAF)has confirmed that China’s ban has allowed miners from outside of the region, mainly from the U.S., to take over Bitcoin’s global mining operations.
The U.S. accounted for 35.4% of the global hashrate as of the end of August, more than doubling from 16.8% at the end of April.
Mining operations in mainland China have significantly decreased to almost zero, down from a high of 75.53% of the world’s total bitcoin mining hashrate in September 2019. Kazakhstan and Russia now follow the U.S. with hashrate shares of 18.1% and 11%, respectively, up from 8.2% and 6.8% in April.
The movement of crypto miners into the U.S. has created a unique situation for the entire crypto ecosystem, as the world will be watching to see if a government can shut down a technology that’s supposed to be decentralized.
“There are clearly countries that are able to shut down the web or at least control what citizens are able to see on the web. The jury is still out on whether governments could apply similar controls on blockchain, which is likely to be the biggest systematic risk to the technology,” said Max Galka, founder and CEO of blockchain analytics firm, Elementus.
In an email, Galka explained that the China ban presents an “interesting test case” to see if a government can actually ban this technology and how industry participants react to such moves
