US steps into China’s bitcoin breach
The long sheds at North America's largest bitcoin mine look endless in the Texas sun, packed with the type of machines that have helped the United States to become the new global hub for the digital currency.
The operation in the quiet town of Rockdale was part of an already bustling US business -- now boosted by Beijing's intensified crypto crackdown that has pushed the industry west.
Experts say rule of law and cheap electricity in the United States are a draw for bitcoin miners, whose energy-gulping computers race to unlock units of the currency.
"There's a lot of competitors coming into Texas because they are seeing the same thing (as) when we came here," said Chad Everett Harris, CEO of miner Whinstone, which operates the Rockdale site owned by US company Riot Blockchain.
China was the undisputed heartland of crypto mining with about two-thirds of global capacity in September 2019, but last month Beijing declared illegal all transactions involving crypto money as it seeks to launch one of its own.
Figures released Wednesday by the University of Cambridge showed that activity in the United States more than doubled in the four months to the end of August, increasing the market share held by the world's biggest economy to 35.4 per cent. Samir Tabar, chief strategy officer at miner Bit Digital, said the company started to pull out of China in 2020 and accelerated that process as the crackdown intensified. They have operations in the United States and Canada.
"China's bitcoin mining ban was basically an unintentional gift to the US," he said. "Thanks to their ban an entire sector migrated to North America -- along with innovation, labor and machines. "Some of the key pulls toward the United States are simply a democratic government, a court system and the power to protect property rights.
"If you're going to make long-term investments and accumulate wealth in a country, you want to have some confidence that it's not going to be taken away by the government," said David Yermack, a crypto expert at New York University.
He expected the shift to the United States to be temporary, saying places like Nordic countries have cheap and abundant renewable energy, as well as plenty of cold weather to cool the hot-running mining machines.
The steady increase in US-based mining operations has fanned the ongoing environmental criticisms of the industry's massive annual electricity consumption -- more than what the Philippines uses in a year, according to Cambridge University data.
An ongoing backlash has been fueled by concerns the industry relies on carbon-emitting power sources that contribute to climate change.
Source: www.thedailystar.net
