China is continuously cracking down against crypto mining for compelling approximately 50% of miners of the world to hit the bricks. The prominent destination for these miners, who are departing from China as a result of the extended regulations imposed by the authorities, seems to be Texas. This scenario indicates that China is concerned about the negative effect of the massive requirement of energy for the mining operations on the regions having rich energy sources.
A nationwide ban on cryptocurrency is expected from China
Although the tabulation of mining power all around the world during 2021 has not been done up till now, as CNBC said, yet approximately 75% of the global Bitcoin mining is done within China. Four major provinces are responsible for most of the operations of mining, including Yunnan, Sichuan, Xinjiang, and Mongolia. Coal plants are being utilized by Inner Mongolia and Xinjiang, while Yunnan and Sichuan use the hydropower resources within the regions. The Chinese government has already ordered to cease mining operations in those regions as well as Qinghai.
As known to everyone, a lot of issues have already been created by these bans. A significant problem is a drop in the hash rate around the globe by which the global computing power of the Bitcoin network has been increased. In the earlier days of 2021, within the global hash rate of monthly share China’s average was 65%, as stated by Cambridge Center for Alternative Finance. The 36%of the global usage of energy was solely credited to Xinjiang. Even then, Bitcoin has justified being resilient in overcoming these drops in hash rate till the ban was leveled against crypto mining.
Another burning issue seen by everyone was that the miners would probably continue the mining without permission. This problem has been persistent in Yunaan, and those operating beyond law were threatened by the authorities to cut their power supply.
Bitcoin miners to flock toward a new dwelling ‘Texas’
The Chinese miners who are law-abiding require a changed venue for the continuation of the mining process. Texas is a favorable spot for the companies, which abandoned their mining activities, such as Great American Mining, Argo Blockchain, and Bitman. These companies are shifting to the Lone Star State. It has been estimated by CNBC that up to 50% of the total hash rate that was credited to China would settle down in Texas.