Forex in this article
• USA cements top spot in prospecting for the crypto veteran
• China regains second place in hashrate, but how?
• Expansion of mining activities: decentralization and ecological footprint
A study by the Cambridge Center for Alternative Finance shows the global distribution of Bitcoin mining. The ranking is still dominated by the USA with almost 37.84 percent of the hashrate. However, China surprisingly took second place in January 2022 with 21.11 percent. It is followed by Kazakhstan with 13.22 percent, Canada with 6.48 percent and Russia with 4.66 percent.
advertising
High hashrate in China despite ban
After the ban on cryptocurrency mining in June 2021, the hash rate in China went towards zero. However, the rate rose significantly again in September. This confirms the assumption that Chinese mining activities have not only shifted abroad, for example to Kazakhstan, but that “significant underground mining has also developed” in China, according to the researchers.
This could also mean that the mining activities were carried out in disguise via proxy servers via Germany or Ireland. The relatively high hash rate for Germany of 3.06 percent and Ireland (1.86 percent) in January 2022 allows this conclusion. Since major activities are not known in either country, the use of VPN or proxy services and redirected IP addresses could play a role.
Although larger investors have withdrawn from China, it is assumed that the miners have organized themselves into small operating sizes in a decentralized manner within the country and are increasingly using off-grid electricity. They could get their electricity from hydroelectric power plants, to which normal data centers are also connected, in order to dig under the radar of the authorities.
Obviously, a significant portion of the hardware that has been in operation in secret for the past few months is now going back online, Peter Marggraf from the Crypto Supply hosting service told BTC Echo, citing his Chinese partners.
Expansion of mining activities in the USA: decentralization and ecological footprint
The new study on the geographic prospecting landscape has not only provided insights into Chinese post-ban activities, but also pointed to the confirmed US leadership. In some places, China’s ban on bitcoin mining has even been called a “trillion dollar gift” to the US.
The data from Cambridge shows that Bitcoin mining in the USA is mainly concentrated in the three states of Georgia (30.76 percent), Texas (11.22 percent) and Kentucky (10.93 percent). Important factors for this are access to comparatively cheap electricity, available hosting capacities and legal regulations. Mining activity is also increasing in New York, California, North Carolina and Washington.
Kazakhstan and Russia are interesting players in the mining landscape due to their geographical proximity to China: Kazakhstan became the center for miners who left China after the ban, according to the study authors. The hashrate was more than 18 percent in October 2021. However, power outages, a one-week internet shutdown and legal regulations and tax increases caused the market share to shrink. Russia, on the other hand, would have sufficient energy reserves, although geopolitical risks became apparent early on. The Russian central bank is also campaigning for a ban.
Editorial office finanzen.net
Image sources: GeniusKp / Shutterstock.com, Igor Batrakov / Shutterstock.com