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U.S. Becomes Global Crypto Mining Leader After China's Ban

Bitcoin
(Image credit: Tom's Hardware)

After Chinese authorities banned bitcoin mining in the country earlier this year, the U.S. overtook the former leader and became the world's main bitcoin mining source with over 1/3 of the global hash rate. The U.S. is trailed by Kazakhstan and Russia. The majority of bitcoins are mined by large companies that run their own datacenters.

From 75% to 0%

China controlled around 75% of the global bitcoin hashrate in September, 2019, according to figures published by the Cambridge Centre for Alternative Finance, reports Financial Times. As bitcoin exchange rate skyrocketed in the recent quarters, large mining datacenters were deployed in other countries, including the U.S., Kazakhstan, and Russia.  

As a result, China's share dropped to 44% this April and after the authorities banned cryptocurrency mining in May, it dropped to zero (at least as far as legal mining is concerned). In September, China banned all crypto-related operations illegal in the country, which further lowered appeal to mine bitcoins or other cryptocurrencies there.  

By contrast, the U.S. share of the global hashrate rose from 17% in April to 35% in August, whereas Kazakhstan's share increased from 8% to 18% in the same period. Russia is behind Kazakhstan with an 11% share, up from 7% in November, 2020.  

"The China shutdown has been great for the industry and US miners," said Fred Thiel, chief executive of Marathon Digital Holdings, a company that mines minted coins in Las Vegas, in a conversation with FT. "Overnight, fewer players were going after the same finite number of coins." 

In the U.S., some crypto mining companies even acquired halted coal-fueled power plants to feed their farms. Meanwhile, in Kazakhstan the country face shortages of electricity as miners from China moved their equipment to this nearby state. To grab its piece of the crypto currency pie, the Kazakh government even passed a special crypto tax that will kick in next year.

900 Bitcoins Mined Daily

Thiel estimates that around 900 bitcoins are mined every day. Earlier this year it transpired that bitcoin mining consumed more power than countries like Argentina or Ukraine where some 45 million people live. 

For obvious reasons, it makes the most financial sense to mine bitcoins and other crypto currencies in countries with cheap energy. Unfortunately, the cheapest energy comes from power plants fueled by coal and other fossil fuels which tend to pollute the atmosphere. 

So far, no detailed research about the carbon impact of cryptocurrency mining have been presented, but it should be rather tangible to say the least. In the meantime, cryptocurrency miners are deploying new farms in Europe and North America, two regions that have been fighting with CO2 emissions for quite a while now.  

"Our current focus is accelerating the construction of compliant mining farms in North America and Europe," a representative for mining rig maker Ebang International Holdings told Reuters recently.

  • InvalidError
    With crypto hitting Kazakhstan, I can almost imagine Sacha making another movie about the rises and falls of crypto, maybe even have a segment where he attempts to start a crypto farm for the glory of the minor power of Kazakhstan, or something :)

    Still, any country with meaningful CO2 footprint reduction objectives cannot let itself get invaded by crypto mining and retain green creds as every GWh burnt on crypto-mining is one more GWh coming out of non-renewable power plants, be it directly by burning fuel to catch up with crypto farms' demand or by consuming renewables that would otherwise have reduced use of non-renewables.
    Reply
  • Krotow
    InvalidError said:
    Still, any country with meaningful CO2 footprint reduction objectives cannot let itself get invaded by crypto mining and retain green creds as every GWh burnt on crypto-mining is one more GWh coming out of non-renewable power plants, be it directly by burning fuel to catch up with crypto farms' demand or by consuming renewables that would otherwise have reduced use of non-renewables.

    Also Europe have noticeable electricity generation shortage prediction for this winter. But money don't smell...
    Reply
  • Giroro
    Has California banned crypto mining yet?
    Or are their energy czars too busy banning computer monitors that idle at 5W when they would really prefer 4W, or requiring backup generators to be battery powered, or whatever else is their ridiculously useless monster of the week.

    At this point, I think the most exciting promise of quantum computing is that some kid is eventually going to crack bitcoin's cryptography and bankrupt it's cult, for the lulz.
    Reply
  • InvalidError
    Giroro said:
    At this point, I think the most exciting promise of quantum computing is that some kid is eventually going to crack bitcoin's cryptography and bankrupt it's cult, for the lulz.
    Yay, I'm not the only one hoping conventional crypto will get solved someday and blow the whole thing over if governments don't ban the lawless make-believe currencies first, be it out of taxation self-interests or environmental concerns :)

    Imagine if quantum computing solved wallet crypto, you get to clean out all wallets with enough blocks on the chain to figure out their private key.
    Reply
  • korekan
    it should be banned. the profit only goes to several people. and the waste of energy is enormous, not to mention there are cabling, rack, pc components, AC, which will caused e-waste faster and will probably will not reach second hand
    Reply
  • escksu
    korekan said:
    it should be banned. the profit only goes to several people. and the waste of energy is enormous, not to mention there are cabling, rack, pc components, AC, which will caused e-waste faster and will probably will not reach second hand

    No doubt crypto mining is wasting power, numerou other activities too are also wasting powe and should be banned.

    1. Smoking is a massive waste of oxygen and resources.

    2. Gaming. Those gaming gpus and consoles sucks so much power and does nothing productive.

    3. Gasoline cars, esp. those higher than 2L. Fuel guzzlers that serves no purpose. You never need to 3-4L V8 just to be able to move around..

    4. Motor racing...

    5...alot more to list...
    Reply
  • spongiemaster
    korekan said:
    it should be banned. the profit only goes to several people. and the waste of energy is enormous, not to mention there are cabling, rack, pc components, AC, which will caused e-waste faster and will probably will not reach second hand
    Crypto isn't getting banned in the US. There's no money to be made banning it. The gov't wants to add their name to your list of entities that profit from crypto. There is plenty of money for them to make from regulations and taxation.
    Reply
  • InvalidError
    escksu said:
    No doubt crypto mining is wasting power, numerou other activities too are also wasting powe and should be banned.
    Crypto is wasting power mostly to run a scams, criminal enterprises, illegal gambling rings, etc.

    At least smoking, racing, gaming, etc. have entertainment value.
    Reply
  • spongiemaster
    InvalidError said:
    Crypto is wasting power mostly to run a scams, criminal enterprises, illegal gambling rings, etc.

    At least smoking, racing, gaming, etc. have entertainment value.
    Smoking has entertainment value? How much money are people wasting on insurance premiums having to cover the medical costs incurred by smokers?
    Reply
  • korekan
    escksu said:
    No doubt crypto mining is wasting power, numerou other activities too are also wasting powe and should be banned.

    1. Smoking is a massive waste of oxygen and resources.

    2. Gaming. Those gaming gpus and consoles sucks so much power and does nothing productive.

    3. Gasoline cars, esp. those higher than 2L. Fuel guzzlers that serves no purpose. You never need to 3-4L V8 just to be able to move around..

    4. Motor racing...

    5...alot more to list...

    i agree, the smoke can harm other inhale it and it already regulated at most place
    i dont agree, crypto miners will have many device for their activity, a gamer will only have at most multiple and not running all the same time while miners simultaneously
    agree, it should be banned if the engine not efficient, in motorbike Euro has a tight regulation even better we will move to EV
    it will move to EV too
    others yea many of them should be started to be tight regulated, but the article is for miners, let not go abroad of the topic
    spongiemaster said:
    Crypto isn't getting banned in the US. There's no money to be made banning it. The gov't wants to add their name to your list of entities that profit from crypto. There is plenty of money for them to make from regulations and taxation.

    Probably they are waiting some business impacted because miners, and they can extract from it business complaining about it.
    Reply