For as long as we can remember, China has been the crypto playground for Bitcoin miners accounting for a staggering 70% of bitcoin mining activities globally. This figure is even more mind-boggling when considering that the Chinese government has never warmed to cryptocurrencies and their development within its borders.
With crypto mining activities enjoying exponential growth in the country, Chinese authorities have employed heavy-handed tactics to crack down on local cryptocurrency mining farms. With such swift action from government authorities, Bitcoin miners have either gathered or abandoned their equipment and fled to greener pastures to continue their activities.
Why has China cracked down on Bitcoin mining?
Like all other cryptocurrencies, Bitcoin is known to be highly volatile, and its price reflects speculation on its future value — making it a risky investment for crypto enthusiasts. While Chinese authorities have an extensive list of reasons for cracking down on crypto activities in the country, the one most central to their decision is that Bitcoin’s wild price swings severely threaten China’s economic and financial stability.
With such a large proportion of Bitcoin miners and investors in the country, it comes as no surprise that Chinese authorities have taken such a hard stance so swiftly. Government officials are of the opinion that cryptocurrencies disrupt economic order and have forcefully stemmed the flow of the crypto wave in the country. Additionally, Bitcoin mining requires a lot of energy and miners draw these resources from shared supply lines to the detriment of Chinese citizens and businesses.
For Bitcoin miners, every minute that their computers are off translates to a loss of money. Time really is of the essence, so finding a new home for these Bitcoin refugees is critical. In an effort to continue their activities, Bitcoin miners have sought refuge in nearby countries such as Kazakhstan, Iran, Russia, and Malaysia, where crypto mining activities are permitted under certain conditions. A brighter destination has since dawned, and Bitcoin miners now appear to be shifting the crypto bandwagon to North America.
Why are miners flocking to North America?
An interesting recent study by the Cambridge Centre for Alternative Finance revealed that the US’s share of the global hash rate has shot up four-fold to almost 17% — the second-largest behind China for cryptocurrency mining. With top-grade power infrastructure and regulatory stability, both the US and Canada are seen as ideal locations for Bitcoin mining.
Moreover, these wealthy North American neighbours offer an entrepreneurial culture, an educated workforce, and legal protection for businesses — very appealing reasons for Bitcoin miners to pitch up in their droves. These factors separate the US and Canada from the next tier of crypto mining countries discussed above, and such conducive crypto mining environments directly translate to more money.
Is North America ready to embrace crypto miners fleeing China?
While moving a crypto mining farm from one continent to another is not as straightforward as it sounds, it certainly is a step in the right direction. Bitcoin itself has no physical form — they are created, exist and can be transferred only online — but constructing a Bitcoin farm can take up to 18 months in a foreign country.
Bitcoin miners do need sufficient energy sources, connectivity and internet access, and the right equipment together with enterprise-level services that promote and support their activities, and adequate levels of transparency and trust — all of which can be found in North America. Energy prices are relatively cheap in North America, with some regions giving Bitcoin miners the opportunity to sell unused electricity back to the grid — a win-win for all concerned.
When considering this great migration to the promised land, not only will Bitcoin miners have access to a thriving crypto community in North America that is brimming with innovation, but North America will benefit from hosting industry specialists who actively contribute to the development of cryptocurrencies and their virtual environment.
With that being said, North America appears to be well-positioned to adopt an influx of expert crypto miners who will make invaluable contributions to a crypto ecosystem where interest levels are quickly growing with each waking hour — exciting times indeed!
It is important to note that investing in Bitcoin and Bitcoin mining activities is a risky and highly speculative proposition. This article does not provide recommendations, advice or guidance regarding cryptocurrency investments or mining but is rather our opinion on such activities. Investors must conduct their own research and engage in the services of qualified professionals before making any financial and/or cryptocurrency investment decisions. We do, however, recommend established platforms like Wisly to monitor and analyse your crypto investments.