The following content is sponsored by Global X ETFs.
Bitcoin Mining Moves to America
Bitcoin mining is a process that verifies transactions on the blockchain ledger, while also bringing new bitcoins into circulation.
To be successful at this, cryptominers require vast amounts of computing power, meaning electricity becomes one of their most significant costs. This pushes them to locate wherever electricity is cheapest.
For years, China was the optimal location—the country has an abundance of cheap, coal-powered electricity. However, in September 2021, the Chinese government issued a blanket ban on all crypto activities.
In this graphic sponsored by Global X ETFs, we illustrate a movement that’s being dubbed “the great mining migration”.
Bitcoin Hashrate by Country
The University of Cambridge maintains various datasets on the Bitcoin blockchain, including power consumption and hash rate. Global hash rate measures the total computational power that is dedicated to mining.
The table below shows a breakdown of global hashrate by country.
|Country||Share of Global Hash rate|
as of September 2019 (%)
|Share of Global Hash rate
as of August 2021 (%)
This data shows us how dramatic the shift has been. Just two years ago, China accounted for over three quarters of global Bitcoin hashrate. The country is now expected to miss out on $6 billion in annual cryptomining revenues.
The New Bitcoin Capital of the World
So why are cryptominers choosing the U.S. as their new home? For starters, America offers a greater level of relative stability.
If you’re looking to relocate hundreds of millions of dollars of miners out of China, you want to make sure you have geographic, political, and jurisdictional stability.
– Darin Feinstein, Founder, Core Scientific
Within the U.S., Texas is one of the hottest spots for cryptominers to relocate. The state not only has plenty of open land, but also a deregulated power grid. This allows cryptominers to negotiate rates with different power providers and sign longer-term contracts.
According to Square, cryptomining has environmental benefits, too. The financial services company believes that bitcoin mining is in fact a complementary technology for clean energy production and storage.
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