China has finally banned Bitcoin (BTC) mining farms from its soil. Hunted by Chinese law enforcement, the miners migrated to other countries more open to cryptocurrencies. Apparently, many miners have chosen to relocate their infrastructure to Texas.
China took action against Bitcoin mining farms in May 2021. For the sixth time in eight years, Beijing has banned minors from Chinese territory. The government has put forward ecological concerns. Most provinces quickly issued warnings to individuals who generate cryptocurrency. This is particularly the case for the provinces with the most farms: Xinjiang, Inner Mongolia, Sichuan, and Yunnan.
This new turn of the screw caused a 25% drop in Bitcoin’s hash rate or the computing power delivered by the computers (or nodes) that maintain the network. Fearing sanctions from the authorities, many mining farms have packed up. Note that China indeed concentrates more than 65% of the hash rate of the Bitcoin network.
BITCOIN MINERS LEAVE CHINA FOR THE UNITED STATES
Driven from Chinese soil, the miners migrate en masse to other more welcoming territories. As reported by our colleagues from CNBC, this exodus is referred to as “the great mining migration”. Many managers of mining farms have decided to relocate their activities to countries such as Iran, Kazakhstan, or Russia. These three nations provide access to cheap electricity and evade regulations.
Other miners are turning instead to the state of Texas in the United States. Texas has several strengths to appeal to mining farms, such as low-cost electricity. Moreover, the proportion of electricity generated by renewable energy is increasing every year. Currently, 20% of electricity production in Texas comes from wind turbines.
Importantly, the Texas electricity grid is completely deregulated. Customers can choose from numerous electricity providers and harness the energy as they see fit. Finally, many political leaders in Texas are openly in favor of cryptocurrencies. Under these conditions, Brandon Arvanaghi, a former security engineer at Gemini (a cryptocurrency exchange), believes that Bitcoin mining “will become a real industry in the United States”.
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