China, the main cradle of crypto mining, has not been able to contain the activity, despite all the crackdown on the sector. The computing power dedicated to creating bitcoin is about to hit a record high, with most miners moving to other countries, where electricity bills are among the cheapest in the world.
Currently, the bitcoin hash rate – which measures levels of mining of the world’s most valuable cryptocurrency and is measured between Quilohash and Exahash – has risen to 172 million “terahash” per second, the highest since May according to data from Blockchain.com.
Since miners were expelled from China in May, the United States, Iceland, Norway and Canada have become the parent company of the sector, according to data from the Cambridge Center for Alternative Finance.
“China’s mining ban has just caused a geographic shift, from what we see [movimento] toward other countries, including Canada and the United States,” commented Jason Zalowsky, chief technology officer at Hut 8 Mining Corp., based in Toronto, who was contacted by Bloomberg.
Bitcoin miners play an important role in the cryptocurrency market because they create new currencies and ensure the security of the underlying technology, which relies on powerful computers that solve mathematical equations. The higher hash rate means that the encryption network is more difficult to disrupt.
Miners are encouraged to run as many machines as possible when the price of bitcoin rises, which partly explains the pace of this indicator’s recovery.
According to Sam Doctor, director of strategy at digital asset specialist Bitoda, public Bitcoin mining is likely to end at 180 million and 190 million terahashes per second. These forecasts are accompanied by estimates from the major “players” in the market.
Last week, Marathon Digital, a US-listed mining company, expected it to reach record mining levels by the middle of next year, after building a renewable energy platform in Texas.
Riot Blockchain, another Nasdaq-listed mining company, has also raised expectations for an increase in mining next year as a new facility in Colorado begins operations.
Beijing vs. Bitcoin: A Battle without a Armistice Looming
In September, the Central Bank of China (PBOC) intensified its pressure on cryptocurrencies, officially declaring that all transactions related to this type of digital asset are illegal and should be banned.
All cryptocurrency-related transactions, including services provided by foreign exchanges to residents of Chinese territory, are now considered illegal financial activities.
In this way, China delivered the final blow to cryptocurrency. After several notices and announcements, the central bank wanted to send a clear message that any transaction involving digital currency would be considered illegal. Advertising activities related to this type of asset are prohibited.
In addition, the Chinese authorities have also announced a ban on any kind of financial support for new cryptocurrency mining projects.
India joins the war?
In the last week of November, India decided to announce the end of cryptocurrency in the country. The Indian government is planning to pass, in the coming months, a decree “forbidding mining and trading” of this type of cryptocurrency.
Narendra Modi’s CEO, however, highlighted the possibility of “certain exceptions in order to boost foreign investment in the country in blockchain technology,” according to the international press.
Similar to what is already happening in China with the digital yuan, in the United States, with the “Hamilton” project aimed at creating a digital dollar, and in the European Union with the study plan for the digital euro, the decree of New Delhi also intends to launch a virtual currency issued by the central bank (CBDC in its abbreviation in English).
The statement came a week after Shaktikanta Das, the governor of India’s central bank, emphasized that “the country needs to discuss the issue of cryptocurrencies.”
“Wannabe internet buff. Future teen idol. Hardcore zombie guru. Gamer. Avid creator. Entrepreneur. Bacon ninja.”