Much of what you read about cryptocurrency mining will be about mining in China and North. America. Nevertheless, there is a relatively small but growing percentage of mining capacities in those parts of the world that we do not hear about so often: Norway, Scotland, Paraguay, Georgia and Siberia.
Currently, China accounts for about 60% (previously this figure reached 80%) of world bitcoin mining.
Since 2017, a Chinese mining companyBitmain locates mining centers in other countries and actively cooperates with foreign mining companies. Recently, Bitmain announced the launch of a new mining center in Texas, which, according to the company, will become the world's largest Bitcoin miner with a capacity of 50 MW. To launch the mining center, Bitmain partnered with the Canadian company DMG and attracted investments from Peter Thiel.
The opening of a major center in the US by a Chinese mineris part of a broader decentralization trend of bitcoin mining around the world. Bitmain now even offers its services to other mining companies that want to move or start work in other countries. The company has developed a map - World Digital Mining Map - as a catalog of promising places for opening mining centers, which lists sources of electricity and other specifications.
What are mining companies oriented to?
The main indicator, of course, isstable source of low-cost electricity. A May 2019 report from CoinShares, a research firm, said: “The pursuit of the cheapest electricity remains the cornerstone for a competitive advantage in bitcoin mining.”
At the same time, miners are increasingly attractedrenewable sources of electricity (hydroelectric power, wind energy, solar energy). According to a Coinshares report, renewable energy accounts for about 74.1% of bitcoin mining.
Another indicator is the cold climate,which reduces equipment cooling costs, although recent technical improvements make this factor less important. The climate of Norway, Iceland and Siberia is best suited for mining companies that are considering the decentralization of their capacities.
Another important factor is regulation.cryptocurrencies and the political situation in the country. For example, due to the political crisis in Venezuela, miners cannot be completely confident in their investments, while Iceland is likely to be a more stable country in the foreseeable future.
Where is Bitcoin mined today?
Given all these priorities, many minersdecided to move or open their centers in places far beyond China and North America. Here is a brief overview of some of the most promising countries and regions:
Siberia is a growing international centerfor mining bitcoin on the site of former factories and near hydroelectric power stations. Relatively cheap tariffs for electricity and the Siberian climate attract miners from other countries.
According to recent studies, Russian miners account for 10% of the bitcoin network capacity (about 600 MW).
The German company Northern Bitcoin is now placing its facilities inside a former metallurgical mine called Lefdal, where a data center operates today.
Cheap renewable energy generatedhydropower plants in the fjords. Norway’s northern climate allows miners to more efficiently cool equipment. In addition, the Norwegian government is very positive about bitcoin.
Scotland is actively launching offshore wind farms to produce low-cost renewable energy.
A small mining center in the southwestScotland, located near the sea, hopes to expand its activities when more renewable wind energy appears. In a politically neutral environment, there are no restrictions on Bitcoin mining.
Georgia is known for its friendly attitude to bitcoin and cryptocurrencies. During the last bull market in 2017, it ranked third in the world in mining bitcoin after China and the United States.
BitFury, one of the world's largest manufacturers of mining equipment, operates here. The government welcomes Bitcoin mining and has adopted a comprehensive blockchain strategy.
The Paraguayan government is encouraging bitcoin mining, hoping to make the country a global mining center. A lot of cheap electricity comes from two large hydropower plants: Itaipu and Yatsireta.
According to Bitfury, which is partnering withThe South Korean company Commons Foundation has launched several mining centers in this country, Paraguay now uses only half of the electricity generated by these two hydropower plants.
The main advantage of bitcoin mining inVenezuela is a very low cost energy. Recently, the government expressed interest in using Bitcoin in addition to Petro’s own digital currency to pay for government spending, as the country faced international sanctions and the economy was in a very difficult situation.
Miners have been active in Venezuela since 2014and formed a fairly wide community, but in a recent thread on Bitcointalk, concerns were voiced about the government’s policy, which plans to tighten control over mining.
The climatic conditions of Iceland are well suitedminers, while hydropower and geothermal power plants are a stable source of renewable energy. However, the recent increase in miner activity is still a concern for local ecologists.
An international community of miners has long been formed in the country. Genesis Mining has been operating in Keflavik since 2014.
Decentralization of mining: why is it important?
Decentralization is one of the key principlesbitcoin. Bitcoin is a decentralized system, but mining itself is still quite centralized in China. The increase in decentralization reduces the potential impact of an individual government on mining.
The negative attitude of the Chinese government towardsBitcoin and cryptocurrencies as a whole caused many cryptocurrency companies to leave the country, while miners began the process of decentralization, but there is still a long way to go. It is known that the country's authorities are considering a ban on mining in the country, although the most recent data indicate that China does not plan to ban the extraction of cryptocurrency.</p>