US becomes world's largest bitcoin miner country after China crackdown

The US has become the world’s largest bitcoin-mining nation after a regulatory crackdown in China earlier this year saw the country plummet from a dominant 38 per cent of global market share to zero.

Analysis from the Cambridge Bitcoin Electricity Consumption Index (CBECI), published by researchers at the University of Cambridge, shows that the US more than doubled its own global market share, from 16.8 per cent in April to 35.4 per cent at the end of August, as Chinese miners moved their. Following China’s crackdown on Bitcoin (BTC) mining earlier this year, the US has officially become the largest Bitcoin mining hub, followed by Kazakhstan and Russia, researchers at Cambridge University have found With a global hashrate (or computational power of the network) share of 35.4% as of the end of August, the US is now home to the largest share of Bitcoin hash power in the world, Michel Rauchs, Digital Assets Lead at the Cambridge Center for Alternative Finance (CCAF), wrote in a blog post published on Cambridge University’s website today. However, they stressed that "every model is an incomplete representation of reality that relies on specific assumptions, some of which may be debatable."

The United States has overtaken China to lead the world with the largest share in global bitcoin mining networks, according to data from the University of Cambridge, published on Wednesday.The U.S. lead follows China’s crackdown on bitcoin mining in recent months, which sent the worldwide price of bitcoin plummeting. China issued a nationwide blanket ban on crypto mining last month, in a move that has devastated the industry there and pushed many miners overseas.

The US overtook China as the world’s biggest source of bitcoin mining two months after Beijing banned crypto mining this year, new data have revealed. China’s share of the global hashrate — the computational power required to create bitcoin — fell from 44 per cent to zero between May and July, showed figures published by the Cambridge Centre for Alternative Finance on Wednesday. The country accounted for three-quarters of the global hashrate in 2019.

The US share of the global hashrate increased from 17 per cent in April to 35 per in August, while Kazakhstan rose 10 percentage points to 18 per cent in the same period. China’s State Council, or cabinet, banned cryptocurrency mining and trading in May, citing environmental and financial concerns. The decision prompted an exodus of miners in search of cheap energy and crypto-friendly politicians. China’s bitcoin mining ban resulted in the “great mining migration”, said Sam Tabar, chief strategy officer at Bit Digital, a New York-based bitcoin miner. The company suspended its operations in China, which it had been winding down since October 2020, after the prohibition.

China was the biggest miner of Bitcoin until authorities there effectively banned the practice. Now, the US has claimed China’s Bitcoin mining crown.

In China, sophisticated computers humming around the clock in specially ventilated warehouses were an increasingly common site amid a cryptocurrency mining boom. At their height in 2018, China’s bitcoin prospectors accounted for 74 percent of the world’s bitcoin production. However, due to the current political crackdown, many newly minted bitcoin moguls are decamping to places like Texas, South Dakota or Canada, with significant implications for the evolving industry.

In September, Chinese authorities reiterated that all virtual currencies were considered illegal in the country, as it put in place a nationwide ban on crypto mining. In a statement published by China’s central bank, government agencies vowed to “resolutely clamp down” on the industry in the name of national security and social stability. “Virtual currency does not have the same legal status as legal currency,” it said.

At the end of August, America accounted for 35.4% of the global hash rate, a measure of computing power used to extract the digital currency, according to a Cambridge Centre for Alternative Finance study published on Wednesday. That’s more than double the activity seen in April.

There’s a strong possibility that covert mining is still happening in China, but routed through virtual private networks that make it appear the computers are operating in another country. Recent increases in the hash rate in Ireland and Germany are likely the result of miners using VPNs or proxy servers, according to the Cambridge research.

Miners are seeking cheap electricity and welcoming governments to fuel the boom in the virtual currency that’s approaching record highs again. The token is up more than 370% in the past year to trade around $54,650 with a total market value of about $1 trillion.

Another notice released by China’s National Development and Reform Commission said the ban on crypto mining was part of China’s wider pledge to reduce carbon emissions to meet climate change goals. Bans were previously ordered only by individual provinces. China is, however, planning to launch central bank digital currencies and is piloting a digital-yuan in a handful of major cities.

Elsewhere in the world, El Salvador in June became the first country to formally adopt bitcoin as a legal tender, in a move that would allow citizens to pay taxes via cryptocurrency. In the United States, Elon Musk, the chief executive of Tesla, said that his all-electric vehicle company would return to accepting bitcoin as payment once it confirms that enough miners are using renewable energy to power their networks. A trio of U.S. senators in August proposed new tax reporting requirements for cryptocurrency transactions.