By
Bhushan Akolkar
April 26th, 2024
The United States now dominates more than 35% of the global Bitcoin hashrate. Over the last few months, China’s dominance has dropped from 65% to zero.
The United States has been clearly gaining at the cost of China’s heavy crackdown on crypto miners. As per the latest reports, US has emerged as the number one destination for Bitcoin miners beating China for the first time in history.
On Wednesday, October 13, new data from Cambridge University disclosed this development. As of July, the United States alone caters to 35.4% of the total Bitcoin hashrate, as per the Cambridge Centre for Alternative Finance. This is also a staggering 428% surge from the hashrate dominance in September 2020.
Of course, this staggering growth comes on the backdrop of China banning Bitcoin mining earlier this year. The Asia economic giant is also going through one of the biggest energy crises faced by the country. In May 2021, China completely banned crypto mining activities forcing miners to relocate to overseas destinations. Before that, China catered to a massive 65% of the global BTC hashrate. However, this share has now dropped to zero, as per the data from Cambridge.
North America and the US emerged as one of the top destinations attracting these miners. Dubbed as the “great migration”, a lot of Chinese miners have now set up their base in the US over the last few months. Besides, North American miners have also started with capacity expansion and upscaling their hardware inventory.
Offering the Right Mining Environment
Post the Chinese crackdown on crypto mining in May, the industry has also witnessed a massive shift towards the use of renewables and clean energy. Several locations in the US offer this incentive to the miners.
The Washington state has emerged as a top choice with some of the largest hydropowered mining farms. Similarly, New York has been providing substantial amount of hydroelectric power. On the other hand, Texas’s share of renewables is also growing with time. It continues to add more wind and solar power capacities.
Thus, Texas also boasts to be having the lowest energy prices which is a major incentive for crypto miners. With the BTC hashrate going high and network difficulty increasing, electricity cost is a major metric to consider in miner revenue. This major shift towards clean energy and zero-emission is challenging the narrative of the skeptics that BTC is bad for the environment. Speaking to CNBC, Blockstream CEO Adam Back said:
“Mining is price sensitive, so as to seek out the lowest-cost power and the lowest-cost power tends to be renewable because if you’re burning fossil fuels … it has extraction, refinement and transport costs”.
Apart from having low electricity costs, states like Texas have crypto-friendly policies along with an adequate supply of hosting infrastructure. Furthermore, the state leaders have also initiated pro-crypto measures.
After the United States, Kazakhstan has emerged to be the second big destination for crypto miners. This neighboring country of China caters to 18.1% of the total crypto mining. The coal mines of Kazakhstan provide a cheap and abundant supply of energy. However, as said, the industry has been making a move towards renewable. Thus, Kazakhstan could just be a temporary stopover for miners before granting to the west.