China’s cryptocurrency presence continues to shrink amid an ongoing crackdown on the industry, while the United States has subsequently emerged as a new hub for crypto activities.
More and more crypto exchanges have announced plans to stop registering mainland Chinese users and phase out existing users there, and many mining pools are exiting the mainland market as well.
For example, f2pool, one of the world’s major Bitcoin mining pools in hashrate, announced on Friday that it will shut down operations on the Chinese mainland by the end of this year.
“If we detect a user is from mainland China, the account will become inaccessible to the mining pool services within 14 days,” f2pool said in a statement, adding it has previously ceased services in Burundi, Central African Republic, Congo, Cuba, Iraq, Iran, North Korea, Lebanon, Libya, Sudan, Somalia, South Sudan, Syria, Yemen and Zimbabwe.
China appears keen to develop blockchain technology, but it continues to hold a strong stance on banning crypto-related industries. On Sept. 24, Chinese authorities jointly issued two notices to outlaw crypto transactions and crypto mining, and many industry players have since been stopping services for mainland Chinese users.
Mclouds, a cloud mining company, is also among the latest to do so. It announced on Monday that it will shut down its domestic mining machine hosting and renting services by the end of this year. Back in May, it had already blocked access for mainland Chinese IP addresses to visit its website, the company said in the statement.
Chinese tech giant Tencent also said last week that it has closed down and suspended some content creation accounts publishing crypto-related content and promoting crypto mining on its platforms.
U.S. sees growing hashrate share
In the wake of the stepped-up ban in China, many crypto miners are moving to more regulation-friendly shores, and the U.S. has appeared to be benefiting from the exodus.
The U.S. has overtaken China’s leading position in cryptocurrency mining, according to the latest data from the Cambridge Bitcoin Electricity Consumption Index compiled by the Cambridge Centre for Alternative Finance. At the end of August, the U.S. accounted for 35.4% of the global hashrate share — which refers to the level of computing power required to mine — representing a significant surge from 16.8% at the end of April.
Kazakhstan, one of the popular destinations for Chinese miners, came in second with 18.1% of the global hashrate share, up from 8.2% at the end of April, while Russia’s share climbed to 11.2% from 6.8%, the Cambridge data show.
Michel Rauchs, digital assets lead at the CCAF, wrote in a Wednesday post that mining operations in mainland China have “effectively dropped to zero, from a high of 75.53% of the world’s total Bitcoin mining in September 2019 when this data was first recorded.”
More players expanding to the U.S.
In a bid to ramp up its U.S. mining capacity, Hong Kong-headquartered crypto miner BIT Mining announced on Monday that it will increase its investment in an Ohio crypto mining data center to add up to 65 megawatts of power capacity in addition to the 85MW per the original design, bringing the Ohio site’s total planned power capacity up to 150MW.
BIT Mining added that it has terminated its Texas data center and will bring down the power capacity at its Kazakhstan crypto mining site to 40 MW, to “optimize the cost-effectiveness of its data center deployment.”
The authorities in Kazakhstan have pointed an accusing finger at the country’s crypto mining sector as a factor that led to power shortages in some parts of the nation. Some miners have been forced to halt operations due to power shortages.
“We have one mining farm in the south of Kazakhstan that has been disconnected from the electricity grid. It’s been three weeks now,” Didar Bekbauov, a co-founder of Xive, a crypto mining company in Kazakhstan, said earlier this month in an interview with Forkast.News, adding the halted operation accounted for almost half of the company’s total operation. “Some small and medium miners are in a panic. Everybody is looking for some [alternative] electricity.”
Singapore-based Atlas Mining yesterday announced it is expanding its cryptocurrency mining operations in the U.S. in a multi-year hosting service agreement with Compute North, a U.S.-based crypto mining infrastructure provider.
The deal will see Compute North providing over 100 megawatts colocation capacity — enough to power a small city — for Atlas’ mining operations in the United States. Currently 100 megawatts works out to approximately 31,000 mining machines mining about 620 Bitcoins per month.
“The U.S. government is very open, especially in certain states,” Chris Haag, chief operating officer at Atlas Mining, told Forkast.News in an interview, adding that states such as Texas and New York offered some of the cheapest power rates in the entire world. “A lot of renewable energy is available here — solar, wind, hydro, we have an abundance of that here.”
The growth of crypto miners using renewable energy sources would also help expand the renewable sector in the U.S., Haag added.
Michelle Lim contributed to this report.