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Author Topic: ViaBTC Insight: Mining Cost May Rise as the U.S. Becomes New Bitcoin Mining Hub  (Read 42 times)

kido

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The last month witnessed a series of Chinese risk warnings on Bitcoin mining for the goals of “carbon neutrality” and “peak carbon”. That triggers a “mining farm kick out”, with large mining farms emptied, massive mainframe shut down, and miners forced abroad. The rapid plunge in the hashrate is shattering China’s position as the global cryptocurrency mining center.

Some countries have also followed suit by issuing crackdown policies like China. One big factor is the energy consumed by Bitcoin mining and a series of potential disasters that may hit as Earth continues to warm up. Worldwide, 139.86 Twh of energy is used by the new industry, almost the same as an entire country such as Ukraine, according to Bitcoin Energy Consumption. At the same time, carbon emissions reach 66.43 Mt, equal to what Israel produced annually. Yet the crypto market is not at its prime time.
By contrast, North America and Central Asia are more friendly to crypto miners. This does not mean governments there are not environmentally conscious. It is just that revitalizing their economies is more important than environmental protection to them, which has to do with the regional economic development stage and their decision-making priorities.
Mining rigs are mainly moving to North America and Central Asia, with Canada, the U.S., Kazakhstan, and Russia being the top four destinations. They are chosen for a mix of factors: how friendly are the local policies for Bitcoin mining, whether the local power load meets the mining demand, whether the mining resources are of high quality (including the rig host rates and hosting service quality), whether the climate is suitable for mining, and most importantly, how low is the electricity rate. After all, the power bill will take up much of the total mining cost in the long run.
Of the four places above, the U.S. is most likely to be the new pivot worldwide.
In the wake of China’s mining clear-outs, the world’s top 10 mining pools like F2Pool, Antpool, BTC.com, and Poolin saw a big mining power drop. ViaBTC Pool with the mature global operation was an exception, and it even occupied the global mining throne once.
At the same time, a US-based mining pool called Foundry USA is rocketing to the top 10 from outside the top 40. A review of its six-month hashrate growth shows a hashrate increase of over 700% since January 2021. Similar growth is also registered by other local pools in America.
The latest data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) indicates that China’s hashrate dominance is 46% in the second quarter, down from January. By comparison, the U.S. captures 16.8%, a net increase of nearly 60% from January. This is still before China’s ban on crypto mining. The Q3 hashrate data was not released, yet China being replaced by the U.S. is predictable. The migration of Bitcoin mining across the Pacific Ocean is already a reality.

Bitcoin is recognized by more and crypto gains popularity, while energy consumption and global warming bring potential threats. The contradiction causes geeks and environmentalists in the industry to target clean energy. Musk also spoke out about Tesla allowing transactions in Bitcoin again once a certain percentage of mining moves to renewable energy.
The clean energy application and innovation are the future, so are the unavoidable energy consumption of Bitcoin mining and the change in energy structure. However, as countries differ in environmental protection and energy control laws and regulations, Bitcoin miners must face the fact that different administrative jurisdictions, local labor costs, electricity rates, and tax policies are very likely to bring additional costs. In short, all potential factors listed above may make mining more expensive.
That said, as long as the Bitcoin prices remain stable and the industry keeps moving ahead with clear policies in the long run, most miners will not mind spending more.

 

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