The United States is now the leader in bitcoin mining as China's share has fallen to zero. In June, China instructed banks to seize transactions and issued bans on mining.
The U.S. Overtakes China in Bitcoin Mining
According to the research done by the Cambridge Bitcoin Electricity Consumption Index or CBECI stated that at its peak in September 2019, China accounted for more than three-quarters of all bitcoin mining.
China's crackdown in mining led to a 38% fall. However, this was offset by a 20% bounceback over July and August, suggesting that some mining equipment was redeployed overseas.
China has since announced that all bitcoin transactions are illegal. The ban happened after the period covered by Cambridge's research.
Miners earn money by creating new bitcoin, but the computing power needed to do it requires massive amounts of energy. They audit bitcoin transactions in exchange for a chance to get the digital currency.
Global mining needs massive computing power, which uses huge amounts of electricity, and contributes to global emissions.
The CBECI tracks the distribution of power that bitcoin mining uses, and it gets its data from numerous commercial mining pools around the world.
The latest data covering May to August shows that most bitcoin mining is now based in the U.S. Around 35.4% of the activities are done in the country.
The U.S. became leading in bitcoin mining it was predicted it might ban Bitcoin due to its environmental consequences.
Meanwhile, Kazakhstan gets second place in bitcoin mining, covering 18.1% of the activities, while Russia is third, covering 11% of the Bitcoin mining activities, according to Bloomberg.
The changing attitudes around the world to crypto are confusing businesses. The decline of China as a crypto mining leader has been unexpected, and it happened fast.
Eventually, the Chinese government has decided that it would no longer accept crypto. The country does not trust its anonymous nature, and it is cautious of the environmental effects of mining.
On the flipside, Kazakhstan has welcomed crypto companies and is cashing in. The country has more than doubled its contribution to crypto mining since early 2021.
However, there are still signs of strain. The rapid growth is already putting pressure on electricity levels in some cities, according to BBC.
China's mining ban has reflected a decline in bitcoin's energy consumption, but that fall will flip as mining recovers. Currently, Bitcoin is 0.45% of global electricity production.
The researchers are still studying how the new ranking will change the energy sources used to mine bitcoin. It can be either with renewables or fossil fuels.
Earlier research by Cambridge revealed that Chinese miners migrate annually.
Chinese miners move between provinces due to the cheap electricity offered by some regions where hydroelectric power is available. With the ban, miners need to look for cheap electricity.
Massive amounts of mining in the United States are based in areas like Washington, where hydropower is used. It ensures low-cost electricity.
According to the BBC, some Chinese miners have migrated to Texas's electricity grid's cheap electricity. And Kazakhstan taking over these crypto miners will come at an environmental cost.
The U.S. Department of Commerce reported that at least 87% of Kazakhstan's electricity is from fossil fuels, while coal consists 70% of generation.
This article is owned by Tech Times
Written by Sophie Webster