Bitcoin mining: US pips China as top global destination for cryptocurrency mining

In an unprecedented development, the United States has eclipsed China's position to account for the largest share of bitcoin mining globally. By overtaking China, the US recorded nearly 35.4% of the global hash rate as of August 2021, followed by Kazakhstan and Russia. Data released by Cambridge Centre for Alternative Finance revealed that the US was the number one destination for bitcoin transactions, development and maintenance. 

US outpaces China as top destination for bitcoin mining

It may be recalled that Chinese authorities had imposed a ban on cryptocurrency activities compelling miners to shut down or reside elsewhere. China's share of power of computers connected to the global bitcoin network known as 'hash rate' fell to zero by July from 44% in May, as per the data. As of July, 35.4% of bitcoin's hashrate was in the US which showcased a 428% surge since September 2020. 

Hence, the US does owe a part of the newfound hegemony in the bitcoin mining sector to China for imposing the cryptocurrency outage earlier this year. The study conducted by Cambridge University revealed China as the market leader in terms of hashrate until twelve months ago but Beijing's cryptocurrency crackdown pulled out the majority of the world's bitcoin miners. 

Why is US a hub for cryptocurrency miners?

States like Texas boast some of the world's lowest energy prices which adds to the major incentive to miners who complete in a low-margin industry. In such scenarios, the sole variable cost incurred is typically the energy used. Also, the US is viewed as a hub of renewable power sources while Washington state is regarded as mecca for hydropower mining farms. In addition, New York is recorded to produce more hydropower than any other state east of Colorado and is said to count its nuclear power plants towards its 100% carbon-free electricity goal. Furthermore, reports suggest that the share of renewable energy in Texas is escalating with 20% of its power from windmills. Therefore, the grid continues to provide solar and wind-based power. 

Experts have opined that US' shift to renewable resources and investments toward zero carbon emission, clean energy came to the fore to counter-narratives that bitcoin is degrading the environment.