U.S. Topples China As the Top Destination for Crypto Miners, Kazakhstan Is At Second
The U.S. has emerged as the number one destination for Bitcoin miners overtaking China for the first time in history. On Wednesday, October 13, the Cambridge Bitcoin Electricity Consumption Index (CBECI) provided new insight into the Bitcoin network's daily electricity load estimate.
According to CBECI, as of July, the U.S. accounted for 35.4% of Bitcoin's hashrate. Hashrate is the collective computing power of miners in a specified area. According to the Cambridge Centre for Alternative Finance, it is a 428% gain compared to last September.
Earlier this year in May, the Chinese government called for a strict ban on bitcoin mining and trading, which led to the great mining migration. In June 2021, a growing number of miners headed to Texas due to the region’s low energy prices. By July 2021, there was a total reversal in the absolute hashrate generated by the U.S. and China.
The miner relocation happened as they seek to maximize their profits by cutting down energy costs and seek cheap and stable power irrespective of location. Apart from Texas, other parts of the U.S. have a huge appetite for hydroelectric power.
Miners across the nation have also secured nuclear power as a source of energy, decreasing greenhouse gas emissions. This transformation towards clean energy sources has forced the sceptics to reconsider their opinion that BTC is harmful for the environment.
Blockstream CEO Adam Back asserts that mining is price sensitive activity. And in a broader perspective, he believes the cheapest and most affordable energy is produced by renewable sources as fossil fuel have hidden cost of extraction, refinement and transportation.
The U.S. is also proactively making efforts to assist the great mining migration. Besides providing a stable and cheap power source, it is also is home to crypto-friendly policymakers with an adequate supply of hosting infrastructure. Deregulated power grid with real-time spot pricing lets miners decide between various providers allowing complete control.
On top of that, jurisdictional stability aid in private property protections rights for miners assets. All these facilities make the U.S. a dream destination for any miner supported by a strong pro-crypto community.
America's played smart with tactics and calculated guess by predicting the lack of infrastructure for mining in future. Hence it started preparation for abundant hosting capacity over the past few years.
However, not the entire migration of Bitcoin miners has happened to the U.S. some of the miners moved base to China’s neighboring county of Kazakhstan. Interestingly, Kazakhstan is just behind the U.S. in terms with a 18.1% share in crypto mining.
But unlike the U.S, Kazakhstan doesn’t facilitate clean energy use for crypto mining operations. Thus several market experts believe that it could be temporary for crypto miners before shifting to the next base.
However, Kazakhstan is mulling on the introduction of a law that brings extra taxes to crypto mining operations. This could deter the existing miners from continuing operations further.