Chinas wish to ban cryptocurrencies started to look more like a realistic plan in July 2021 when they requested the shutting down of a company “suspected of providing software services for virtual currency transactions.” While that was not the first time the Chinese government made moves against the digital asset community, it was certainly not the last.
While the Chinese hash rate (the percentage of global Bitcoin mining computers) was just over 75% in September 2019, April this year saw a dramatic decline to 46%. However, the U.S. saw an increase from 4% to just below 17% in the same period. The reason for that change is down to the China State Council, indicating underlying financial risks.
Will The U.S. Dominate Crypto Mining?
While looking at the figures, you may think that they will. However, with the recent changes to the U.S. Infrastructure Bill, the Chinese miners seeking better grounds may be disappointed with their first choice. That could be pushing Central Asia and Europe into top contenders and exciting some people in the community as there will be a better global distribution of the hash rate, thus even more decentralized.
The truth is, the cost of energy and labor in central Asia is lower than in the U.S. and most of Europe, so people are likely to move there than anywhere else in the world.
The Biggest Problem
Time is not on the miner’s side. Wherever they choose, they need to move quickly. Not because of the legislation, but because BTC price is still pretty high even with the recent fall. That is leaving the mining industry at full capacity, and they need to set up their new mining infrastructure quickly to keep up with demand. If they fail and BTC mining drops, that would cause catastrophe in the crypto world.