Bitcoin Mining and the Future: Last year was a big year for the cryptocurrency mining industry, specifically in the United States. BeInCrytpo spoke with Gavin Qu, Vice President of Operations at PrimeBlock.
In 2021, the crypto world faced a host of new challenges and developments. From Bitcoin as a legal tender in El Salvador to NFTs, the past year has revealed signs of a more decentralized future.
Cryptocurrency mining is another aspect of the space that has undergone a major transformation. 2021 highlights the less green side of mining.
Earlier this year, concerns about energy consumption in the global bitcoin mining industry escalated. Reports have emerged claiming that if Bitcoin were a country, its energy use would exceed that of Venezuela and Sweden. Moreover, Bitcoin e-waste generation skyrocketed until China’s strict ban on cryptocurrency mining turned the industry on its head.
Despite the initial market crash, the cryptocurrency scene has seen some green trends as a result of China’s decisions. The ban on cryptocurrency mining in China presented other opportunities besides being an environmental benefit. As miners and crypto-related companies flee China, other places such as the United States and Kazakhstan are reaping the benefits.
Best mining destinations
China held the reins as the world’s largest bitcoin mining country until the ban brought that number down. Before the fall, a miner outside Dalian, China, mined 750 bitcoins every month. This equates to 3% of all bitcoins. Other major sites are found in Iceland, Russia, and the United States.
The latter has found itself in a new position as the world leader in bitcoin mining. It is now a safe haven for those fleeing Chinese oppression. Many cities in the United States specifically welcomed the escape from Prohibition, such as Miami. City Mayor Francis Suarez is known for his charismatic stance on cryptocurrency.
In Texas, one of the top US destinations for bitcoin miners, Mayor John King of Rockdale recently received nearly 40 inquiries from crypto-mining companies, many of them across the Pacific Ocean as a result of the ban. This influx has caused experts to speculate on the new role of the United States in the global crypto-mining scene.
In light of the mining ban, PrimeBlock, a digital asset miner and infrastructure provider, has played a large role in the relocation of mining rigs and infrastructure from China to the United States, BeinCrypto spoke to Gavin Qu, Vice President of Operations at PrimeBlock about the future. mining in the area.
According to a report by the Cambridge Center for Alternative Finance, in July of 2021, 35.4% of the global Bitcoin hash rate was derived from the United States. Official index of the new US position on the top, an increase of 428% over September of the previous year.
Chu pointed out why the United States is an ideal choice for a large mining emigration. The first factor is that America has access to renewable energy, which is a critical component to success in the mining industry. The second is that America provides a stable legal and political environment, even aware of the continuing degree of ambiguity regarding the regulation of cryptocurrencies.”
However, Xu emphasized that mining is still a new industry vulnerable to all the growing pains in the new market.
“Mining is still a new industry, and so some regulatory uncertainty is to be expected. In America, we know that policy changes will generally take place through deliberate and transparent legislative and regulatory processes.”
“In a country like Russia, or a Central Asian country like Kazakhstan, there are a lot of political and legal risks when it comes to mining. Corruption is also a major problem in these countries, which makes it difficult for miners to work there. Moreover, the lack of To sustainable energy practices means that miners in these countries are using a lot of valuable resources, which is not sustainable in the long term.”
As miners migrate their operations abroad, places that receive this inundation from crypto-wealth hunters are responding.
“We are also seeing an increase in transparency and professionalism in mining as miners migrate to the United States,” Chu said. “In China, there has been a lot of secrecy and uncertainty surrounding the mining operations. But in the US, we are seeing a lot of openness and compliance with best practices.”
As mentioned earlier, the mayor of Miami is a fan of cryptocurrency. He and the mayor of New York City now receive their salary in bitcoin. “Senator Ted Cruz is advocating mining as a way to help repair the electrical grid, so politicians are starting to see value in crypto mining,” Chu added. Despite some troubling moments regarding regulation from US regulators, Qu believes there is no serious concern as presented by China.
We don’t expect to see that kind of impact due to regulatory changes in the US. We are optimistic that the evolving regulation of cryptocurrency activities will be driven by a fruitful public-private dialogue focused on innovation, stability, safety, market integrity, user and investor protection, and predictability, which is critical to the capital allocation decisions of entrepreneurs. “
Practically speaking, “we are seeing an increase in the number of industrial data centers being built specifically for mining, and the migration of miners to areas with cheaper electricity. For example, Kentucky, Georgia and Texas are experiencing significant growth in the mining sector due to the availability of low-cost energy, along with with the most favorable regulatory environments.”
Despite some tough mining moments in 2021, Chu believes that the future of bitcoin mining looks “bright.”
“There is a limited aggregate supply of Bitcoin, and as more people start using it, the demand for mining will continue to grow. That’s why I think we’ll see a lot of innovation in the mining industry in the coming years.
I also think we’ll see a lot of consolidation in the industry. Mining is incredibly competitive, and so you need a great deal of scale and flexibility to be successful. In the race for greater computational power, those who come up with creative solutions will win.”
The trends for the near future are looking greener. At the height of the initial chaos caused by the Chinese ban last summer, industry professionals already saw these moments as an opportunity to shift toward cleaner energy sources.
Bitcoin miners are looking for the cheapest sources of electricity because it is one of the most important factors of profitability. Regional sources of renewable energy are also becoming attractive, from solar to hydropower. With the increase in renewable energy sources, the crypto mining scene in the United States is constantly becoming more sustainable.
Miners are also turning to sources such as retired power plants and other idle facilities to reduce overall costs, which are often more sustainable than new power plants.”
For decades, the United States has played a vital role in international markets. In the world of technology, global central cloud services such as Amazon, Google, and Microsoft are dominated by the United States. Experts like Qu believe that this dominance will now appear in bitcoin mining.
The central effects of mature supply chains and economies of scale continue to drive down mining prices in the United States.
With accessible renewable energy, abundant real estate, and an improved regulatory environment, the United States seems unlikely to lose its hegemony.”
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