The United States has become the world’s epicenter for Bitcoin mining after a crackdown in China effectively eliminated the practice in the former cradle of the industry. According to a Cambridge Center for Alternative Finance study published on Wednesday, 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. That’s more than double the activity seen in April.
Bitcoin miners shift from China to the U.S.
The surge of bitcoin miners in the U.S has been driven by China’s move to whittle down the industry to control financial risk. In the early days of Bitcoin, China was the base for the biggest miners tapping into cheap electricity from coal and hydro plants. Now, Beijing’s intensifying efforts to curb the cryptocurrency market, announced in May, is paying off. China’s observed share of Bitcoin mining has effectively hit zero, the Cambridge researchers found. That’s down from as high as 75% in September 2019 when Cambridge started collecting data. It’s also a marked decrease from the 46% level notched in April just this year.
Crypto miners prefer to use clean energy to power their computers.
There’s a strong possibility that underground mining is still happening in China but routed through virtual private networks that make it appear the computers are operating in another country. According to the Cambridge research, recent increases in the hash rate in Ireland and Germany are likely the result of miners using VPNs or proxy servers. Miners are seeking cheap electricity and welcoming governments to fuel the boom in the cryptocurrency that’s approaching record highs again. Bitcoin is up more than 370% in the past year to trade around $54,650 with a total market value of about $1 trillion.