Destinations for Bitcoin mining: BeInCrypto presents five countries to watch, as China leaves the center of the mining scene.
2021 has been a big year for Bitcoin. The year started with the cryptocurrency hovering around $30,000, reaching a new all-time high of over $68,000 in November. Overall, the market capitalization of the crypto industry has reached a total of over $2 trillion.
However, China momentarily took the entire industry down after banning Bitcoin mining in April. After which, the price of BTC fell back into the $30,000 range. Ahead of the first news in April, new stories surfaced of other crackdowns in various Chinese provinces. By August, China had disappeared from the map in terms of monthly global hashrate share.
While the ban caused major Bitcoin price drops and market fluctuations, some places around the world reaped the rewards of China’s decisions.
Destinations for Bitcoin mining: friendly atmospheres
For a destination to be ideal for sustainable Bitcoin mining operations, certain factors are necessary.
One of the most important factors is undoubtedly the local price of energy. In destinations where energy prices are low and electricity is readily available, miners have an easier time conducting large bitcoin mining operations. In Argentina, miners use subsidized energy to mine BTC.
On the other hand, in Kosovo, the energy crisis in the region has led to the banning of cryptocurrency mining in the country. In this regard, favorable government policies are another factor of ideal circumstances for crypto mining.
China, and more recently Kazakhstan, are examples of the ramifications of the effects of political instability on crypto mining. On the other hand, North American destinations with a relatively stable political climate are on the way to becoming destinations of choice.
Additionally, locations with green or sustainable options create a welcoming environment for sustainable mining practices. In El Salvador, the government has launched an initiative to mine Bitcoin using volcanic energy.
Taking into account these conditions and geopolitical factors, BeInCrypto has looked at the main mining destinations in the world. Statistical information is based on the Cambridge Bitcoin Electricity Consumption Index.
United States
North America, with its relative market and political stability and economic energy costs, has become the new star of crypto mining in the world. The United States particularly felt the effects of China’s Bitcoin ban. As miners have fled the country and found new ground to operate in many states, the country has become the undisputed hashrate capital of the world.
According to data published by the Cambridge Center for Alternative Finance, the US has an increased hashrate of 428%, compared to September 2020 figures. In August 2021, the US accounted for just over 35% of the global hashrate .
Some US states are hotspots for mining. The Mayor of Miami has stated his goal of making South Florida, Miami in particular, a hub for exiled crypto miners. New York and Texas also saw a notable increase in mining activity after the Chinese ban. Insiders believe that the United States government is already mining Bitcoin.
Canada
The US’s North American neighbor has also seen an increase in activity since China’s ban, despite being a center of crypto mining for a long time. Cheap electricity prices help Canada produce nearly 10% of the world’s hashrate.
Cheap electricity prompted companies like Black Rock Petroleum to install one million bitcoin miners in Canada last year.
Additionally, the Canadian bitcoin mining sector has an eco-friendly tinge. In September, carbon-neutral Canadian mining company Canada Computational Unlimited (CCU.ai) went public in Toronto. Cryptocurrency miner Mintgreen plans to power the city of North Vancouver, Canada with heat generated from bitcoin mining starting this year.
Russia
Russia is another dominant location for Bitcoin mining, with a global hash rate of 11.23%. Energy prices in the country are low, especially in the Siberian region. Known for its rugged snowy landscapes, the area is also known as an energy goldmine among local miners.
In early 2021, a Russian miner imported 20,000 bitcoin mining rigs into the country, in the largest such import.
After China banned mining, the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (RACIB), local authorities and companies collaborated to attract Chinese miners to the region.
However, due to the influx of miners looking for an inexpensive haven, the Russian Energy Minister has introduced “tariffs for cryptocurrency miners.”
Kazakhstan
In neighboring Kazakhstan, cryptocurrency miners are also finding refuge thanks to low electricity prices. The country accounts for 18.10% of the global hashrate. A close neighbor of China, Kazakhstan has been an easy destination for fleeing minors. Former Chinese companies BIT Mining and Enegix have both moved thousands of devices and a data center to the former Soviet satellite country.
Due to the influx of miners, Kazakhstan announced plans to introduce electricity surcharges for cryptocurrency miners. Shortly after this announcement, the government also revealed specific crypto mining taxes for 2022.
Later that year, the country felt the brunt of additional miners, resulting in a power deficit.
As mentioned earlier, politics plays an important role in the fate of Bitcoin mining. Whether in direct policies or in indirect causes and effects. The major riots that took place in the country at the beginning of the year caused massive power cuts. These outages made miners skeptical, as they disrupted mining capacity.
malaysia
If China has disappeared from the map of cryptocurrency mining in Asia, Malaysia, on the other hand, continues its momentum. The overall hashrate of the country is almost 4.6%.
Over the summer, as the country felt the effects of China’s ban, Malaysia also took action. The government razed a local illegal mining center. Local authorities shut down another crypto mining hub over the theft of $600,000, while earlier this year police arrested a man for stealing electricity for mining.
Bitcoin Mining Destinations: Other Notable Regions
While these locations are among the world leaders in bitcoin mining by hashrate production, other locations are worth mentioning.
The Islamic Republic of Iran accounts for just over 3% of the global hashrate thanks to its low energy costs. Over the summer, due to severe power shortages, the country temporarily banned mining and confiscated equipment. The authorities nevertheless reauthorized it in September, and its mining boom continued.
In Europe, Germany and Ireland have hashrates hovering around 4.5%. These countries remain preferred destinations for minors. Moreover, a few years ago, Iceland was the world leader in cryptocurrency mining. Although this is no longer the case today, the country is still home to one of the largest bitcoin mining hubs in the world, that of Genesis Mining.
Bitcoin Mining Destinations: The Future of Mining
While mining, like most of the crypto industry, has been on the fringes of culture, this is no longer the case. By going mainstream the industry is gaining more recognition, but at the federal level. Predictions for the crypto mining sector over the next year will certainly include more regulations, taxes and restrictions.
However, there will also be a more sustainable mining industry. Last year, the words “sustainability” and “environmental friendliness” were on the minds of many in the bitcoin mining industry.
As the world continues to embrace all cryptocurrencies, their mining will continue to find the places where it thrives.
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