Posted 2 years ago | by Ben Armstrong
Is Chinese Bitcoin (BTC) Mining Moving to North America?
China is known as the dominating force in digital coin mining. According to CoinShares Research, China's Bitcoin miners controlled some 65% of total hash power at the end of 2019. Chinese firms such as Bitmain and Canaan, which are the biggest manufacturers of bitcoin mining hardware in the world, have a substantial impact on the BTC network.
Recently, Chinese Bitcoin mining farms are being shifted to North America. Bitmain is launching a 50-megawatt farm in Texas, and it may be expanded to 300 megawatts. This may mark a turning point in how the Bitcoin network is run, especially with the recent rise in Chinese political instability.
Barry Silbert, the founder of Grayscale Investments, which is a U.S.-based crypto asset management firm, had this to say on the matter:
"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 activity outside of China into specifically the U.S. and Canada.”
Higher Degree of Regulatory Certainty
The recent outbreak of a novel coronavirus in China may just add to the momentum to move BTC mining out of Chinese territory. What began as a trend in 2019 will likely pick up speed as the Chinese economy reels from the shutdown in economic capacity.
Johnson Xu, a senior analyst at TokenInsight, a token data and rating agency, providing examples of Hut 8 and Bitfarms executing “meaningful financing” in 2019, said: “We have seen waves of mining farms started to build their infrastructures outside of China, particularly in North America in 2019.”
Not only does the US offer a far more transparent regulatory structure than China, it also has refrained from banning cryptos. The Chinese economy was able to be controlled by Beijing when times were good, but now it appears that the Central Party is being pushed to its limit by a biological catastrophe.
Big Moves in US BTC Mining
Northern Bitcoin AG and Whinstone US were merged to set up a large Bitcoin mining farm in Texas with one-gigawatt capacity.
According to a TokenInsight 2019 Mining industry annual report, Chinese mining farms still dominate the industry and that this dominance will continue but at a slower growth rate. The report was issued before the outbreak of the novel coronavirus, and may not be a good guide for what is unfolding in 2020.
As China struggles to cope with an economy that has reached a standstill, crypto mining firms will need to find other nations to produce and operate their equipment. North America has a lot to offer any high-tech industry that needs loads of inexpensive power.