After a crackdown on bitcoin trading and mining started by the Chinese authorities back in May, now the United States has overtaken China as the world’s largest producer of Bitcoin, a research published by the Cambridge University reveals.
The crackdown initiated by the Chinese authorities in late May had a devastating effect on the industry and caused many bitcoin miners to move overseas.
The Chinese Hash Rate – the total amount of computing power used to mine bitcoins and process transactions as a percent of the global Bitcoin Network has fallen virtually to zero in July from 44% in May and 75% in 2019, data of the Cambridge Centre for Alternative Finance reveals.
After the crackdown North America and Central Asia became the leading destinations for the bitcoin mining industry, as many Chinese miners moved there, while the mining rig manufacturers also focusing their attention on those markets.
The shift in the industry resulted in a surge in bitcoin mining in the U.S. particularly, which by the end of August accounted for 35,4% of the global Bitcoin Hash Rate, followed by Kazakhstan and Russia.
The US share of the global Bitcoin Hash Rate was just 17% in April, while Kazakhstan’s share of the global Bitcoin Hash Rate rose by 10 percentage points to 18% for the same period. Currently Russia accounts for about 11% of the global Bitcoin Hash Rate.
Bitcoin mining is the process by which new bitcoins are introduced into circulation and is also the way that new transactions are confirmed by the Bitcoin Network. The process involves solving of complex mathematical puzzles and requires high- powered computers.
Bitcoin mining centers are using considerable amount of electricity and are often criticized for not being energy efficient and for using manly coal generated electricity, which is obviously bad for the environment.
According to the Cambridge Bitcoin Electricity Consumption Index, currently the electricity consumption associated with Bitcoin mining is greater than the electricity consumption of the Netherlands or Hong Kong.
On average 900 bitcoins are mined every day.