The U.S. Replaces China as Leader in Bitcoin Mining
Published October 16, 2021 by Elana K
New data from the Cambridge Centre for Alternative Finance shows that the U.S. has replaced China as the world’s largest bitcoin miner following the latter’s crackdown on cryptocurrency.
New data from the Cambridge Centre for Alternative Finance shows that the U.S. has replaced China as the world’s largest bitcoin miner following the latter’s crackdown on cryptocurrency.
While China has never been a proponent of bitcoin mining, in May of this year the country implemented new restrictions that resulted in its hash rate plunging from 44% in May to zero by July. The hash rate represents the measure of computing power used to extract the digital currency. In 2019, China’s hash rate reached as high as 75%.
China’s crackdown has made space for the U.S. to account for the largest share of bitcoin mining, with its global hash rate reaching 35.4% in August 2021. August’s rate is double the U.S. hash rate of 16.8% in April. According to the report, Kazakhstan and Russia now occupy second and third place, respectively, in terms of mining.
Does China Have Something to Hide?
According to the Cambridge research, it’s unlikely that the hash rate for China is really zero. A more likely scenario is that miners have resorted to secret mining via virtual private networks (VPNs) so that it seems that the computers are operating in different countries. For example, there have been recent increases in mining in Ireland and Germany, and it’s possible that these aren’t real surges, but rather, Chinese miners using VPNs.
While covert mining may be taking place in China, it's not necessarily sustainable. Miners who want a safe haven will fare best in countries that encourage mining, like the U.S. In fact, China's crackdown on bitcoin mining and trading places the US in a position to be a long-term leader in the crypto industry. However, since the U.S. has also positioned itself as a leader in environmental concern, it will need to deal with the issue of mining carefully and responsibly, since it requires a lot of energy.
