The 8 Countries That Mined The Most Bitcoins in 2021
- The list is based on a study by the Cambridge Center for Alternative Finance (CCAF), which measured the operational capacity of mining and processing transactions on the blockchain or hashrate.
2021 has been a year of growth for Bitcoin and the other cryptocurrencies. This global crypto boom has prompted hundreds of mining companies around the world to seize the moment and establish their farms in various countries that offer better conditions for activity.
Cryptocurrencies in general are not only attractive assets for investors and speculators. They are also an industry that attracts miners, large and small, looking to make big profits at a time when the price of bitcoin has doubled in less than a year.
Between 2019 and the first quarter of 2021, China was the epicenter of global bitcoin mining. Until May, the Asian giant tolerated bitcoin mining that grew to unsuspected levels in recent years. The red dragon came to concentrate more than 75% of all bitcoin mining activity in the world.
But this ended when the communist government of China made the decision to create its own CBDC or central bank currency. Since then, bitcoin mining has moved to other parts of the world that have flexible rules and an abundance of cheap energy resources.
Countries with the highest Bitcoin hash rates
Although it is not easy to determine where Bitcoin is most exploited or how many cryptocurrencies are created because it is a semi-private activity. The only way to know where there is more activity related to the mining of the largest cryptocurrency in the world, is through the hash rate.
This metric allows to measure the total capacity of the combined network that is used to mine and process transactions on the blockchain. By looking at the hash rate it is determined in which countries there is greater ASIC processing power and therefore where more mining companies are operating.
Here is the list of the 8 countries that mined the most Bitcoin during 2021, not counting China. This list is based on the Cambridge Bitcoin Electricity Consumption Index. However, the University of Cambridge clarifies that the information provided is based exclusively on a sample of data from geolocated BTC mining facilities, collected in conjunction with various mining pools.
China
Since 2019 this country maintained the leadership of global bitcoin mining, accumulating 75.53% of all world activity, according to Statista data. Until October 2020, it maintained these levels of exploitation. From then on, mining began to gradually decrease until reaching 50% in April 2021 and being overtaken by the U.S..
Before the heavy crackdown that began in May in China, the global hash rate reached about 180 million terahashes per second. The biggest source of hash power was located in China. In that country, two-thirds of all the world’s bitcoins were extracted by using around 86 terawatt-hours (TWh) of electricity.
As bitcoin mining continued to decline dramatically from the end of 2020 and throughout 2021 in China, due to the persecution of mining and all cryptocurrency-related activities, activity grew in the US.
Chinese miners decided to move to other regions and countries where governments and regulations offered greater guarantees to develop this activity. Furthermore, in these countries electricity rates are more profitable for bitcoin mining.
Covert mining
But dozens of miners were trapped in China and have now gone underground. Those who had greater financial resources and properties abroad were able to evade the fierce persecution by the authorities that began in June 2021.
Those who had to stay, dismantled their farms and are operating in small units distributed throughout the country to go unnoticed. Particularly in regions with important electricity generation infrastructures, such as the Sichuan hydroelectric dam, located in the south of the country.
Currently, there is no precise data on bitcoin mining in the country. But it is believed that there is a covert mining that operates through virtual private networks. In this way, government controls are evaded, leading to believe that the computers operate from another country.
United States
The rebound in mining activity in the US proved crucial to the recovery of bitcoin after the Chinese mining chase. Although the American miners in the Asian country had already been preparing for what seemed imminent.
So while the price of bitcoin remained low, they were adjusting the accommodation conditions of the mining equipment. For years they developed gigantic infrastructures for the American mining company through large investments.
Data from the Cambridge Center for Alternative Finance (CCAF) shows that the US absorbed most of the miners who fled China. The world’s first economy, it quickly became a global bitcoin mining paradise.
The study of the academic institution describes how the hashrate of the network has been evolving worldwide. Highlighting the advance of the USA, Russia, Malaysia, Kazakhstan and other countries and the fall of China, starting in May this year.
By April 2021, the U.S. had already moved to a global hash rate of 16.85%, according to data from Statista. But in just four months, it managed to reach 35.4% and that number has continued to rise.
Of the states of the country with the highest levels of bitcoin exploitation, Texas stands out. It is believed that the southern state could become the world capital of bitcoin. The state has a great infrastructure and enough electricity. And there the interests of dozens of crypto investors and ambitious young oil executives are converging.
Kazakhstan
The former Soviet republic is ranked second in the world currently in bitcoin mining, behind the U.S. Kazakhstan had an 18.1% hashrate in August 2021, according to the Cambridge Center for Alternative Finance.
The location of Kazakhstan, a country of 18.75 million people located in Central Asia that borders China and Russia, along with the facilities offered by the government, caused Chinese miners to move their mining farms en masse.
But currently the country is facing an energy crisis caused by intense mining activity. The population is suffering constant blackouts due to the shortage of electricity. National energy demand this year grew 8%, above the 1% or 2% annual average.
Some cryptocurrency mining companies located in southern Kazakhstan have had to shut down or relocate their equipment to other countries. Hence, many miners no longer consider this country as a suitable place for the exploitation of bitcoin.
The infrastructure of the national electric power grid does not help either. The transfer of energy from the most energy-rich areas in the north to the most scarce areas in the south is not easy.
Since 2019, the government has made million-dollar investments to support BTC mining that relies primarily on burning coal. But this was not enough. Now lawmakers are demanding greater regulations on mining to prevent the collapse of the national electricity system.
The government expected to earn bitcoin mining tax revenue of close to $ 1.5 million over the next five years. However, the energy crisis has forced the authorities to think of alternatives to make up for the electricity deficit. One of them is the importation of electrical energy from Russia.
Russia
Another of the countries that benefited from the Chinese persecution of bitcoin mining was the Russian Federation. Its proximity to China and abundant cheap energy resources (oil, coal and hydroelectric power) facilitated the move and growth of mining activities this year in Russia.
The country ranks third globally in bitcoin mining with 11.23%, according to the CCAF. After the ban on this activity in China, the city that has concentrated most of the bitcoin farms is Irkutsk, in Siberia.
This region is rich in natural resources and a vast hydroelectric potential to power the computers used in the exploitation of bitcoin. In fact, it is estimated that only 20% of all installed power generation capacity is currently being used.
This makes Russia a prime location for the installation of bitcoin mining plants. In addition, the cold weather helps save energy resources to cool interconnected equipment, which does not stop working 24 hours a day.
The growth potential of bitcoin mining in Russia is very great. The amount of cheap energy available, coupled with the Russian government’s willingness to host large mining facilities, are a plus for any miner looking for a suitable place to settle.
On the other hand, the ban on BTC as legal tender in Russia has not been an obstacle for mining activity to grow. In this immense country that occupies a territory of 17.13 million km², the government of Vladimir Putin is in the process of issuing the digital ruble.
Canada
This is where 9.55% of the entire global bitcoin hashrate is concentrated, according to the data available until July of this year. Canada is consequently the fourth country to mine the most bitcoin in 2021.
Both Canadian and foreign mining companies from China have installed their sheds and equipment in this country. Between April 2019 and April this year, the share of the hashrate in Canada grew from 0.8% to 3%, as it also decreased in China.
The region where bitcoin is most exploited in Canada is Quebec due to its conditions of abundance of energy resources and climate. Canadian miners have confessed to having received joint venture offers from Chinese companies to operate jointly in recent months.
Crypto entrepreneurs in Canada are mostly using hydroelectric power to mine bitcoins. This has helped them avoid criticism for emissions and exaggerated electricity consumption and double their profits.
Iran
The Iranian bitcoin mining industry accounts for between 4.5% and 7% of the global total bitcoin hash rate. The country’s mining sector has grown rapidly since 2017, so the Ayatollah government has been increasing supervision of mining activity.
Despite the fact that the Iranian regime tolerates this activity, because it brings tax dividends, concerns have arisen related to the increasing energy consumption. The authorities even suspect that illegal mining has emerged that is religiously not paying the corresponding taxes and duties.
Legally operating bitcoin mining companies in the country are helping the government create a regulatory framework. In this way they seek to avoid clandestine mining. According to data handled by the Iran Mining Association, around two-thirds of BTC mining in Iran is illegal.
Malaysia
In this Southeast Asian country, mining activity has also grown enormously in recent months. According to figures from the Cambridge Center for Alternative Finance, since April 2021 Malaysia began to expand its mining network.
By July of this year, the country’s monthly global bitcoin hashrate was 4.5%. Some of the miners who abandoned their activities in China took refuge in Malaysia, which boosted the growth of the activity.
Since then, the country’s annual energy consumption has grown incessantly. Right now, it’s over 147 terawatt hours. But illegal mining has also grown, forcing the government to take drastic action.
Thousands of illegal miners in Malaysia are being persecuted by the government. On clandestine farms, the government has confiscated thousands of mining equipment and could now sell it for scrap. The other equipment and encryption platforms seized have been auctioned.
Illegal miners not only don’t pay taxes to the government, but they steal electricity to power equipment. To avoid this, the police carry out permanent raids in places where they suspect mining equipment is operating illegally.
Germany
The country with the largest economy in Europe is among the fastest growing in bitcoin mining. Germany’s hash rate has also skyrocketed this year. According to CCAF data, the country uses 4.4% of the global power of the network.
Although it is not known precisely whether the capacity of operational mining equipment in Germany has increased. According to a report from the University of Cambridge, these recent increases in the hash rate in the country could be a consequence of the use of VPNs or proxy servers by miners.
In Germany bitcoin mining must pay income tax. On the other hand, if users buy any cryptocurrency and keep them stored for a year, they do not pay any tax. Nor if the earnings per sale are less than € 600 per year.
Ireland
The case of Ireland is similar to that of Germany. The increased hashrate is believed to be the result of the use of VPN filters to evade the actual location of the mining equipment’s IP address.
The Bitcoin Cambridge Electricity Consumption Index map shows a hash rate of 4.6%. However, to attract foreign investment, since 2018 the Irish government has been supporting activities related to blockchain technology.
Some mining companies from China have moved to Ireland where there are acceptable state regulations.
On The Flipside
- How see it, the countries that mined bitcoin the most in 2021 are not necessarily those where the cryptocurrency has been best received and adopted by their governments.
Why You Should Care?
These are then the 8 countries that mined the most bitcoin in 2021. Not including China, which, as indicated at the beginning, decided to prohibit and prosecute mining to prevent it from competing with the digital yuan.
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
I am text block. Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
Read more: https://dailycoin.com/the-8-countries-that-mined-the-most-bitcoins-in-2021/
Text source: DailyCoin.com
