Bitcoin Miners Are Moving From China To Nordic Countries
Bitcoin mining is gradually shifting base. From being concentrated in China, miners have started a gradual but steady migration to countries that present more friendly conditions for their industry.
The two major factors that have determined the situation of Bitcoin mining farms over the years have been the cost of electricity and regulatory policies. From the early days of Bitcoin, the bulk of mining operations happened in China. Till date, China still remains host to the majority of Bitcoin miners, leading to some stakeholders regarding Bitcoin as a Chinese-controlled entity.
China’s Bitcoin Dominance
This sentiment was revisited in the heat of the recent struggle by the Ripple team ahead of the suit by the US Security and Exchange Commission (SEC). In one of the paragraphs of the “Summary of Ripple’s Wells Submission” the team claimed that XRP ranked among the top three virtual currencies, “alongside bitcoin and ether, the two Chinese-controlled virtual currencies that the SEC has stated are not securities”.
This description did not sit well with some of the stakeholders in the digital currency ecosystem, prominent among which is Vitalik Buterin, the founder of Ethereum. Buterin took to Twitter to respond to the Ripple team that is behind XRP in what became a rather controversial discussion. However, the subject matter remains why the Ripple team, or anybody would refer to Bitcoin, or any other cryptocurrency as “Chinese-controlled”, when in the actual sense, they are supposed to be decentralized.
Available data reveals that China accounts for 65% of the global hashrate of Bitcoin. Not just that, the bulk of this hashrate is concentrated in a particular region, Xinjiang, which accommodates 35.76% of the global hashrate. In simple terms, this data implies that 65% of the computers connected to the Bitcoin network that are responsible for generating new coins are located in China.
Bitcoin Miners Are Migrating
The attraction of Bitcoin miners from the early days of the innovative technology is attributed to the relatively lower cost of electricity within the region, and the population’s sentiment towards innovation. This sentiment is perhaps responsible for how the country embraced Bitcoin and cryptocurrencies from the early stages. However, since the Chinese government and its regulatory agencies began to employ strict measures towards cryptocurrencies, even the miners have become affected.
The migration of miners away from China is corroborated by Philip Salter, head of operations at Genesis Mining. According to Salter, this is “one of the biggest developments” that is currently happening in the industry. He believes that the reason for this ongoing migration is connected to safety and political stability, suggesting that those western countries are safer and more stable, compared to communist China.
There is a very important strategic shift away from mining in China to mining in western countries like Sweden as Bitcoin investors become more public and want more stability and critical safety.
The ban on cryptocurrency exchanges in China has complicated issues for miners, who cannot easily convert their mined Bitcoins into fiat in order to pay for services such as electricity. Recently in Yunnan province, the Chinese government summarily cut off electricity supply to Bitcoin Miners. These and other complications comprise the challenges that are pushing Bitcoin miners away from China.
The People’s Bank of China (PBoC) is pushing seriously towards the actualization of a state-owned digital currency. There is the perception that when this is realized, the clampdown on other digital currency projects within the region may even come out harder. Also, considering the fact that the miners in China are currently reliant on carbon-based electricity, things are becoming more complicated for them.
Nordic countries like Norway have already moved to eco-friendly green energy. This is a plus for Bitcoin miners that are migrating to this region, as they will be exempted from the accusation of carbon emission and endangering of the atmosphere.