The US has become the world’s center for bitcoin mining after actions in China effectively ended the practice in the former cradle of the industry.
At the end of August, the US accounted for 35.4 percent of the global hash rate, a measure of computing power used to withdraw the digital currency, according to a Cambridge Center for Alternative Finance study published Wednesday. This is more than double the activity seen in April.
The country’s relative share has increased due to China’s move to decongest the industry to control financial risk. In the early days of bitcoin’s 2009 founding, the Asian nation was home to the largest number of miners harnessing cheap electricity from coal and hydropower plants.
Now, Beijing’s intense efforts to curb the cryptocurrency market, announced in May, are paying off. The Cambridge researchers found that China’s observed stake in bitcoin mining has effectively dropped to zero. This is down from a high of 75 percent when Cambridge began collecting data in September 2019. This is also a significant decrease from the level of 46 per cent recorded in April this year.
There is a strong possibility that covert mining is still taking place in China, but is routed through virtual private networks that make it appear that computers are operating in another country. According to Cambridge research, recent increases in hash rates in Ireland and Germany are likely the result of miners using VPNs or proxy servers.
Miners are demanding cheaper electricity and welcoming governments to fuel the virtual currency boom that is again hitting record highs. The token is trading at around $54,650, up more than 370 percent over the past year, with a total market cap of about $1 trillion.
In Kazakhstan, the share of hash rate stood at 18.1 percent in August, up from 8.2 percent in April, while the Russian share rose to 11 percent from 6.8 percent in the same period.
Researchers at the institute, which is part of the Cambridge Judge Business School at the University of Cambridge, collect data on the IP addresses of mining operators from mining pools BTC.com, Poolin, ViaBTC and Foundry.
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