Is China losing its grip on bitcoin mining? According to an executive at Grayscale, many bitcoin mining operations have shifted their attention from China to North America and have promptly moved to western territory to carry out their “currency extraction projects.”
Is China Losing Its Mining Power?
China has long had a very mixed relationship with cryptocurrency. This goes double for mining and currency miners, who at one time, didn’t know if they were going to have a job granted that they chose to remain within China’s borders. The nation has long been divided on bitcoin and crypto mining, at one point suggesting that the practice be fully outlawed due to potential hazards the process brought to the environment.
Eventually, the nation decided that bitcoin and crypto mining was legal, though it’s possible the country had selfish motivations in this decision. China is home to two of the world’s largest cryptocurrency mining operations – Bitmain and Canaan Creative – and its possible the government didn’t want to miss out on tax revenue from what are two large, billion-dollar corporations. By outlawing bitcoin mining, the country stood to lose a lot of money in the end.
But now that mining is back in play, it looks like China is no longer the most desirable area for miners. Barry Silbert – the founder of Grayscale – said that this was the case during a presentation to the company’s many investors, claiming:
What I have seen recently, probably over the past three to six months, is a real growing shift toward attempts to move a lot of that [mining] activity outside of China into specifically the United States and Canada.
Silbert has not explained why this is happening, though it’s been reported that China currently controls as much as two-thirds of the world’s bitcoin and crypto mining power. In addition, the process has become so popular in recent years that there has been a massive demand surge in crypto mining equipment – another revenue source, no doubt, for China.
While it’s difficult to know why so many are suddenly shifting focus to North America, there are a few logical guesses to be made. Regions within the U.S. and Canada often charge considerably less for electricity, with regions such as Texas known for their low energy costs.
Why Is This Happening?
In addition, it’s possible that the coronavirus running through the eastern nation has gotten people scared. With more than 1,000 deaths recorded over the past month alone, miners are likely worried not only about the illness itself, but about the damage it could do to potential business, though one could also argue that the coronavirus has caused bitcoin interest to surge.
Either way, the sudden attention shift could potentially lead to an upsurge in competition in the mining community.