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The United States has supplanted China as the world’s largest center for Bitcoin mining after Beijing announced that the practice would be forbidden.
The U.S. now accounts for more than 35% of the global share of Bitcoin mining, a figure far higher than just a year ago, when it accounted for just 4.2%, according to research published on Wednesday by Britain’s Cambridge Centre for Alternative Finance. Kazakhstan is now the world’s second-largest source of Bitcoin mining, followed by Russia.
Bitcoin mined in China had previously dominated the global supply. The country accounted for nearly 67% of Bitcoin mining worldwide a year ago. Its dominance was whittled down through a series of regulatory crackdowns by Beijing, which culminated in China banning the practice this year.
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By March, less than half of the world’s Bitcoin was being mined in China, and by June, that number had dwindled to about 34%. As of July, mining operations in mainland China had effectively disappeared, although data show that some of the mining rigs may have been relocated. Mining in Kazakhstan, which borders China to the north, ballooned from 8.8% in June to more than 18% in August.
Bitcoin mining is how new Bitcoins come into being. To mine for Bitcoin, high-powered computers are used to verify virtual coin transactions. Bitcoin operates on what is known as a blockchain, essentially a public ledger, that contains the history of every transaction. The miners' computers solve complicated math problems in order to add new blocks to the chain and are in turn rewarded with the digital token, making the endeavor profitable.
Those rigs consume an enormous amount of power and have raised environmental concerns, especially back when the bulk of the digital asset was being minted in China, which consumes a large share of the world’s coal.
Last month, the People’s Bank of China said that not only mining, but all cryptocurrency transactions were illegal and that online services offering trading for cryptocurrencies and overseas cryptocurrency exchanges had been banned.
Exchanges soon began pulling out of China after Chinese Vice Premier Liu He called for a government “crackdown on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”
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The news caused the value of Bitcoin to tumble to about $41,000, although since then, Bitcoin and other cryptocurrencies have pared those losses and surged.
As of Wednesday, Bitcoin was valued at about $56,500, approaching record highs above $63,000 that were seen in April. Ethereum, the second-largest cryptocurrency by market cap, is up more than 56% from six months ago.
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Tags: News, Bitcoin, Technology, China, Foreign Policy, Cryptocurrency, Business
Original Author: Zachary Halaschak
Original Location: US overtakes China as world’s largest Bitcoin mining hub
