The United States has overtaken China to account for the largest share of bitcoin mining globally, according to data released by researchers at the University of Cambridge.
The numbers demonstrate the impact of a crackdown on bitcoin mining and trading launched by the Chinese government in late May, which devastated the industry and caused miners to shut down or move overseas.
China’s share of the power of computers connected to the global bitcoin network, known as the “hash rate,” fell from 44% in May to zero in July, according to data from the Cambridge Center for Alternative Finance. China’s share reached 75% in 2019.
Miners elsewhere have taken over, with mining rig makers focusing on North America and Central Asia, and China’s largest miners have also moved, though this process is met with challenges. logistical difficulties.
As a result, the United States now accounts for the largest share of mining, around 35.4% of the global hash rate at the end of August, followed by Kazakhstan and Russia, according to the data.
Bitcoin is created or “mined” by powerful computers, usually in data centers located in different parts of the world, which compete to solve complex mathematical puzzles in a process that uses electricity extensively.
The expansion of the industry in the United States and its massive use of electricity could therefore pose a delicate question for President Joe Biden ahead of the Cop26 climate talks in Glasgow next month.
Russia’s low energy costs and cool climate allowed some companies using excess electricity to benefit from the bitcoin price spike earlier this year, but concerns are growing about illegal mining.
In a letter to the government in Moscow at the end of September, Igor Kobzev, governor of Russia’s Irkutsk region, pointed to “avalanche-like growth” in energy tariffs, accusing underground cryptocurrency mining .
“(The situation) is further aggravated by the mining ban imposed by the Chinese authorities and the relocation of a significant amount of equipment to the Irkutsk region,” Kobzev said in the letter, according to a report. from the daily Vedomosti on Wednesday.
Authorities elsewhere are more tolerant or even welcoming of bitcoin mining, while Chinese authorities announced even stricter rules for mining and trading bitcoin last month.
“Our current goal is to speed up construction of compliant mining farms in North America and Europe,” a representative of mining rig maker Ebang International Holdings told Reuters after the latest crackdown.
But industry players remain hurt.
“As a veteran who witnessed the birth of the industry in China, I think the situation is dire today,” said Mao Shihang, founder of F2Pool, once the world’s largest bitcoin mining pool, and co-founder of Cobo, a Singapore-based crypto asset. manager and caretaker.
“China is losing its share of computing power… the industry’s center of gravity is shifting to the United States,” he said, speaking ahead of the Cambridge data release.