JackTheRipper
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China is kicking out more than half the world’s bitcoin miners – and a whole lot of them could be headed to Texas
KEY POINTS
China has long been home to more than half the world's bitcoin miners, but now, Beijing wants them out ASAP.
In May, the government called for a severe crackdown on bitcoin mining and trading, setting off what's being dubbed in crypto circles as "the great mining migration." This exodus is underway now, and it could be a game changer for Texas.
Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens.
Despite a lack of reserves that caused dayslong blackouts last winter, Texas often has some of the world's lowest energy prices, and its share of renewables is growing over time, with 20% of its power coming from wind as of 2019. It has a deregulated power grid that lets customers choose between power providers, and crucially, its political leaders are very pro-crypto – dream conditions for a miner looking for a kind welcome and cheap energy sources.
"You are going to see a dramatic shift over the next few months," said Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini. "We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible."
Why does bitcoin use so much energy?
China's mining dominance
2021 data for the global distribution of mining power is not yet available, but past estimates have shown that 65% to 75% of the world's bitcoin mining happened in China – mostly in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan and Yunnan.
Sichuan and Yunnan's hydropower make them renewable energy meccas, while Xinjiang and Inner Mongolia are home to many of China's coal plants.
The drawdown in miners has already begun in Inner Mongolia. After failing to meet Beijing's climate targets, province leaders decided to give bitcoin miners two months to clear out, explicitly blaming its energy misses on crypto mines.
Castle Island Ventures founding partner Nic Carter says that while it's not totally clear how China will handle next steps, a phased rollout is likely. "It seems like we're going from policy statement to actual implementation in relatively short order," he said.
www.cnbc.com
KEY POINTS
- In May, Beijing called for a severe crackdown on bitcoin mining and trading, setting off what's being dubbed in crypto circles as "the great mining migration."
- Texas is an ideal destination for miners, thanks to its abundance of solar and wind power, its unregulated market, and its crypto-friendly political stance.
China has long been home to more than half the world's bitcoin miners, but now, Beijing wants them out ASAP.
In May, the government called for a severe crackdown on bitcoin mining and trading, setting off what's being dubbed in crypto circles as "the great mining migration." This exodus is underway now, and it could be a game changer for Texas.
Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens.
Despite a lack of reserves that caused dayslong blackouts last winter, Texas often has some of the world's lowest energy prices, and its share of renewables is growing over time, with 20% of its power coming from wind as of 2019. It has a deregulated power grid that lets customers choose between power providers, and crucially, its political leaders are very pro-crypto – dream conditions for a miner looking for a kind welcome and cheap energy sources.
"You are going to see a dramatic shift over the next few months," said Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini. "We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible."
Why does bitcoin use so much energy?
China's mining dominance
2021 data for the global distribution of mining power is not yet available, but past estimates have shown that 65% to 75% of the world's bitcoin mining happened in China – mostly in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan and Yunnan.
Sichuan and Yunnan's hydropower make them renewable energy meccas, while Xinjiang and Inner Mongolia are home to many of China's coal plants.
The drawdown in miners has already begun in Inner Mongolia. After failing to meet Beijing's climate targets, province leaders decided to give bitcoin miners two months to clear out, explicitly blaming its energy misses on crypto mines.
Castle Island Ventures founding partner Nic Carter says that while it's not totally clear how China will handle next steps, a phased rollout is likely. "It seems like we're going from policy statement to actual implementation in relatively short order," he said.
China is kicking out more than half the world’s bitcoin miners – and a whole lot of them could be headed to Texas
China is in the process of kicking out all its bitcoin miners, and many of them could be headed to Texas.
