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US becomes top cryptocurrency miner as China crackdown wipes out mining activity

Published 13/10/2021, 11:15
Updated 13/10/2021, 11:23
© Reuters.

© Reuters.

By Samuel Indyk

Investing.com – The United States has become the top destination for cryptocurrency mining, according to the latest data from Cambridge University. The UK-based university publishes monthly data on the evolution of the Bitcoin network’s hashrate, the total computing power on the Bitcoin network.

The US accounted for 35.4% of the total hashrate on the network with mainland China down at 0% after the country’s crackdown on cryptocurrency activity.

China’s Crackdown

Trading in cryptocurrencies in China had been banned since 2019 but the country stepped up its crackdown on the industry earlier this year. In June, China told banks and payment platforms to stop facilitating transactions and issued bans on mining crypto. Images emerged of huge data centres turning off their machines and shipping them to other countries.

Then just last month, China declared all cryptocurrency transactions illegal.

The regulation has clearly had an impact with the hashrate from China evaporating almost overnight.

And now it has become clearer where some of that mining power has gone as miners left China.

The state of Texas was touted as a potential destination for the Chinese mining equipment due to its low cost of energy. Power is one of the greatest costs for cryptocurrency miners so lower electricity prices should equal greater profits from mining activity.

The Governor of Texas, Greg Abbott, has been welcoming to company’s operating in the sector, previously tweeting that Texas was “open for Crypto business”.

UK-based cryptocurrency mining company Argo Blockchain (LON:ARB) is in the process of building a new datacentre in Texas.

Kazakhstan mining

The second highest country for Bitcoin mining is Kazakhstan. Kazakhstan neighbours China and has also seen an increase in hashrate since China’s mines went offline.

The worry here is that Kazakhstan produces much of its electricity from coal which emits high levels of carbon dioxide.

The environmental impact of mining and transacting in cryptocurrencies is one of the reasons why mainstream adoption hasn’t accelerated as fast as some might have expected.

Tesla (NASDAQ:TSLA) CEO Elon Musk previously stopped his vehicle company from accepting cryptocurrencies as payment for vehicles due to the environmental impact.

Latest comments

"China Crackdown"...The boogeyman to be afraid of. America never cracks down. They "regulate". Lol
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