5 Months After China Banned Bitcoin Mining, America Leads Network Hash Rate With 42.7%

5 Months After China Banned Bitcoin Mining, America Leads Network Hash Rate With 42.7%

By ssaurel | In Bitcoin We Trust | 14 Oct 2021

In early May 2021, China banned Bitcoin mining in its territory. This caused the price of Bitcoin to plunge to around $30K over the next few weeks with a general sense of panic in the market.

At the time, I was already explaining that this decision by China was extremely bullish for the future of Bitcoin.

Two problems had been solved at the same time at that time. The first was the excessive concentration of the Bitcoin network's Hash Rate in China, and the second was the environmental problems associated with Bitcoin mining.

Bitcoin's Hash Rate will soon be back to where it was before China banned mining in May 2021

While the Bitcoin Hash Rate fell sharply in May and June of 2021 as a result of China's decision, it has since rebounded strongly:

The great exodus of Bitcoin mining from China to America is confirmed week after week. In America, big players like Riot, Marathon, and Foundry are constantly building up their mining machines to take advantage of the space left empty by China.

It is interesting to see where Bitcoin mining was before China's announcement in April 2021:

The data from Cambridge University showed that China accounted for 46% of the Bitcoin Hash Rate at the time, compared to 16.8% for America. America's share of the Bitcoin Hash Rate was already on the rise as the year 2021 was started at 10.5%.

U.S. states with the lowest electricity costs dominate the sector

At the Texas Blockchain Summit in Austin, which just took place at the beginning of October 2021, data has just been published allowing a real vision of the distribution of the American Bitcoin Hash Rate between the different states based on data from the Foundry USA Pool mining pool:

They show that the main areas for Bitcoin mining in America are the state of New York (19.9%), Kentucky (18.7%), Georgia (17.3%), and finally Texas (14.0%).

Of course, this is only Foundry USA's data, and it should be possible to consolidate it with data from other American players such as Riot Blockchain or Marathon.

Nevertheless, it is likely that these states also emerge from the data from these other mining pools. Indeed, the states where electricity is the cheapest will always be favored to maximize the profits made by the miners.

Based on this observation, one can even imagine that Texas' share of the Hash Rate in America is even higher than that. Electricity from renewables is cheaper there, and we know that Riot Blockchain has a lot of mining machines located in Texas.

America now accounts for 42.7% of Bitcoin's Hash Rate which is great for Bitcoin's ESG score

This also confirms the trend observed at the end of June 2021 by a report from the Bitcoin Mining Council explaining that more than 56% of the electricity used for Bitcoin mining came from renewable energy. Again, Bitcoin is taking advantage of China's mining ban to significantly increase its ESG score, which is now more than excellent.

The fact that New York is so high in Foundry USA's data is great news because New York uses electricity generated by its nuclear plants as part of its goal of 100% carbon-free electricity in the future. In addition, New York produces more hydroelectric power than any other state east of the Rockies. It is also the third-largest producer of hydroelectricity in the country.

Cambridge University has just updated its data on the share of each country in the Bitcoin Hash Rate. What we could assume has happened: America now dominates the Hash Rate of the network with 42.7%. An increase of +60% since April 2021:

America has simply taken China's place as the world leader in the Bitcoin Hash Rate. This is excellent news because the values of freedom conveyed by Bitcoin are more in line with those of America than with the Chinese communist system.

It is just beginning. America will continue to dominate Bitcoin mining in the future

In my opinion, this is just the beginning. America, but also Canada with players like HIVE or Hut 8, will continue to take up more space in the Bitcoin mining sector.

More and more players will be attracted to Texas, which is implementing Bitcoin-friendly laws while offering a deregulated power grid with real-time spot pricing. More importantly, Texas provides access to significant excess energy which is renewable, as well as stranded or flared natural gas.

This attractive environment will attract many players beyond those in the mining industry, with Texas aiming to become the leading U.S. state in the Bitcoin world in the future.

All of this is promising for Bitcoin to strengthen its ESG score while continuing to be the most secure decentralized network in the world.

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