Evicted Chinese Bitcoin miners are moving to Texas

Evicted Chinese Bitcoin Miners Are Moving To Texas - AdobeStock 234658947 1280x640 1 1024x512Texas has become a popular destination for the wave of cryptocurrency miners fleeing China following the tightening of regulations by government officials. China is concerned that bitcoin mining is having a negative effect on energy-rich regions due to the enormous power required for mining operations.

China is moving towards a national ban on cryptocurrency mining

According to CNBC, estimates show that up to 75% of the world's bitcoin mining is done in China. Mining is concentrated in four provinces: Inner Mongolia, Sichuan, Yunnan and Xinjiang. Xinjiang and Inner Mongolia use the area's coal-fired power plants, while Sichuan and Yunnan use the region's hydroelectric resources. The mining of cryptocurrencies in those regions along with Qinghai has already been urged by the government to cease operations.

It is not surprising, of course, that these bans have already caused a lot of problems. One such problem is the drop in the global hash rate which places a value on the computing power of the bitcoin network. At the beginning of 2021, China's average monthly share in the global rate was 65%. The report shows that Xinjiang alone accounted for 36% of global consumption. While bitcoin has proven resilient to these hash rate dips so far, the bans keep coming.

Another problem was the possibility that some miners would ignore the requests and continue mining illegally. This has been a particularly persistent problem in Yunaan, and local authorities have threatened to cut energy power to those who continue to operate outside the law. China's bans are the result of the government's promises to become carbon neutral by 2060.

Bitcoin miners find new home in Texas

For those law-abiding Chinese miners who wish to continue operating, a change of location is required. Texas has become the benchmark for these mining operations. Companies like Bitman, Blockcap, Argo Blockchain, and Great American Mining are just a few that migrate to Lone Star State. CNBC has estimated that more than 50% of China's total hash rate could end up in Texas.

According to Didar Bekbauov, the founder of Xive, the exodus is already underway and could be a huge turning point for Texas. "Texas not only has the cheapest electricity in the United States, but also one of the cheapest in the world." He goes on to say that setting up a mining company is easy and invest requires a minimum capital.

Other benefits Texas offers are a renewable energy-based infrastructure and politicians supporting cryptocurrency. Some of those politicians, like Governor Greg Abbott, have even supported bitcoin mining.