After China effectively eliminated crypto mining with its strict regulations, the US became the world’s biggest source of Bitcoin mining, according to data published by Britain’s Cambridge Centre for Alternative Finance on October 13.
America’s share of global hashrate—the computational power required to mine Bitcoin—increased from 17 per cent to 35 per cent by the end of August, recording a 428% increase from September 2020.
The surge of crypto production in America has been prompted by China’s intensified crackdown on all crypto-related activities to curb financial and environmental risk. Now, China’s global hashrate fell from 44 per cent to zero between May and July, knocking the country’s crypto production to zero.
Consequently, an exodus of miners started fleeing China in search of the cheapest energy sources and crypto-friendly governments, dubbed as the great mining migration. Several miners ended up in Texas since it has the cheapest electricity in the US.
Following the upsurge of crypto mining in the country, US senators Maggie Hassan (D-N.H.) and Joni Ernst (R-Iowa) introduced a new piece of legislation that aims to track foreign crypto mining.
The bill will require the Treasury Department, Attorney General, the U.S. Trade Representative, the Office of the Director of National Intelligence and members of the Federal Reserve to monitor how much crypto was mined between 2016 and 2022, as well as identify the cryptocurrencies that were being mined.
‘In order to strengthen U.S. competitiveness, our government must get a better handle on the role that cryptocurrency is playing in the global economy and how it is being leveraged by other countries. I’m glad to partner across the aisle with Senator Ernst to help ensure that the Treasury Department stays on top of the use of cryptocurrency, including how it can impact our supply chains’, Senator Hassan explained.
However, this is not the only impact that the China crypto crackdown has brought. Michael Rauchs, a consultant focused on digital assets, has seen a positive effect of the harsher regulation imposed by the Chinese authorities against the cryptocurrency market.
‘The effect of the Chinese crackdown is an increased geographic distribution of hashrate across the world, which can be considered a positive development for network security and the decentralized principles of Bitcoin’, said Rauchs.
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