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Bitcoin miners are migrating due to global energy crisis

An employee inspects the computer used to mine Bitcoin at Doctorminer’s mining showroom in Caracas on August 18, 2021. FEDERICO PARRA / AFP via Getty Images

In recent months, cryptocurrency miners have been moving from China, once the world’s largest crypto mining hub, to low electricity costs and abundant renewable energy sources when the world is facing a global energy crisis. We are relocating to various countries all at once.

According to the latest update from, the United States surpassed China as the world’s largest destination for Bitcoin miners for the first time this summer. Cryptographic mining map It is maintained by the University of Cambridge’s Alternative Finance Center, which was released this week.

As of the end of August, 35.4% of Bitcoin’s hash rate is a measure of collective computing power, or mining performance, originating from the United States, according to Cambridge data released Wednesday. This is more than four times more than a year ago when China hosted two-thirds of the world’s Bitcoin mining activity.

The main trigger for the outflow of miners from China Beijing crackdown on cryptocurrencies This year. The latest Cambridge study did not cover mainland China as the number of public mining businesses fell to virtually zero after the government banned all mining activities in June.

“The direct impact of the government’s mandatory ban on cryptocurrency mining in China was a 38% drop in the global network hash rate in June 2021,” said Michel Rauchs, digital asset leader at the Cambridge Alternative Finance Center. It is written as follows. Blog post on Wednesday. “The first 38% drop in global hash rates in June was partially offset by a 20%” bounce “in July and August. This suggests that some Chinese mining equipment has been successfully redeployed abroad. “

Mining is an energy-intensive process for validating and maintaining logs for all crypto transactions on a distributed ledger called a blockchain.

“The main cost of the mining industry is electricity,” explains Andrew Kiguel, founder and former CEO of Hut8, one of North America’s largest Bitcoin mining companies.

According to Cambridge data, many crypto miners who couldn’t or didn’t want to cross the Pacific chose to settle in Kazakhstan and Russia, which are adjacent to China.

“The world does not have enough clean and renewable electricity to meet the demands of today’s world. Therefore, when miners seek new sources, they act economically and produce coal and gas. Will use, “said Kigel.

Both Russia and Kazakhstan are known for their low electricity prices. However, as the global energy crisis continues, the enormous amount of electricity needed to mine Bitcoin threatens regular energy supplies in some places.

For example, Russia’s Irkutsk region warned locals this week that Chinese Bitcoin miners could overload the power grid. Bloomberg report. Irkutsk Governor Igor Kobzev said retail energy consumption in the region this year has increased by 159 percent from last year due to the “avalanche” of underground crypto mining. letter To Russia’s Deputy Prime Minister Alexander Novak on Wednesday.

In contrast, the flood of Bitcoin miners coming to the United States was “an unintended gift” thanks to our relatively abundant renewable energy sources, Bit Digital, a cryptocurrency mining company listed on NASDAQ. Says Samta Beer, Chief Strategy Officer of. Sustainable energy.

“The innovation brought about by Bitcoin miners, especially in the renewable energy sector, was remarkable,” Tabir told observers. “We’re seeing an abandoned coal mill in New York near Niagara Falls being converted to a Bitcoin mining center, drawing power from the Niagara Falls River instead of coal-fired.”

“In the coming months, we can expect more innovation by miners, the innovation that is urgently needed in the power industry, which is usually the sleepy industry,” he added.

Bitcoin miners are transitioning all at once during the global energy crisis

Bitcoin miners are migrating due to global energy crisis

Source link Bitcoin miners are migrating due to global energy crisis

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