The United States is currently the largest destination for Bitcoin miners, surpassing China for the first time. It was already heading in that direction, but new data from the University of Cambridge, released earlier Wednesday, has made it official.
According to the Cambridge Center for Alternative Finance, as of July, 35.4% of Bitcoin’s hash rate (an industry term used to describe the collective computing power of miners) is in the United States. This is an increase of 428% from September 2020.
The United States is partially grateful to China for its new dominance in the mining industry.
Twelve months ago, China was a market leader in terms of hash rate. However, Beijing’s crypto crackdown in the spring has virtually taken half of the world’s Bitcoin miners offline overnight.
All at once, the miners fled China to the cheapest source of energy on the planet, known as “massive mining migration.” Many of them ended up in America.
The newly released Cambridge data will bring China’s average monthly share of global hash rates to zero in July. This is a major reversal from September 2020, when China won about 67% of the market.
“The entire story of China’s domination of Bitcoin has been completely destroyed,” said Boaz Sobrad, a London-based fintech data analyst.
Head to America
The United States has checked a number of boxes for immigrant Bitcoin miners looking for a new home.
For one thing, states like Texas boast some of the lowest energy prices in the world. This is a major incentive for miners competing in low-margin industries where variable costs are usually energy only.
The United States is also full of renewable energy sources.
Washington is a mecca for hydroelectric mining farms. New York produces more hydropower than any other state east of the Rocky Mountains and counts nuclear power plants towards a 100% carbon-free electricity target. Meanwhile, Texas’ share of renewable energy has increased over time, with 20% of its electricity coming from wind as of 2019. Texas Grid also continues to add wind and solar power rapidly.
Miners all over the country also use nuclear power. Some have otherwise fixed their rigs to the energy left behind, such as wasting natural gas in oil fields throughout Texas. This will reduce greenhouse gas emissions and generate money for gas providers and miners.
This shift to zero-emission clean energy sources has already begun to reshape the story among skeptics that Bitcoin is bad for the environment.
“The mining industry is price sensitive and the lowest cost electricity tends to be renewable in order to find the lowest cost electricity, because if you are burning fossil fuels, there are costs of extraction, refining and transportation. “Brockstream CEO Adam Back said.
In addition to reducing electricity costs, some US states, such as Texas, also have the right supply of crypto-friendly policy makers and hosting infrastructure.
The state has a deregulated power grid with real-time…