Where are the next bitcoin mining hotspots now that China is out of the running?
Bitcoin (BTC) mining operations are becoming more and more popular. Only a few years ago, bitcoin mining was taking place on a home computer. Nowadays, entire companies are being built around the idea. Enormous mining farms are being established and are filled with top-of-the-range processors and graphics cards to earn as many coins as possible. Unfortunately, this comes with a downside.
China has caused much disruption to the cryptocurrency market in the past few weeks as it begins to crack down on mining operations that are consuming too much of the country’s power. In addition, the enormous energy consumption involved is beginning to cause environmental concerns. Clearly, miners are going to have to stop and think about how to go forward with their operations. Starting with relocation.
But where to look? An ideal country for bitcoin mining should fulfill the following criteria:
1.) It should have a cold climate
The hardware involved with mining uses a lot of power, so it gets hot. One reason mining operations consume so much power is that they need to constantly circulate air or liquid cooling around their processors to prevent overheating. A cold climate will help enormously with this, as well as saving money on air conditioning.
2.) It should have an abundance of renewable energy
As stated before, one of the main concerns with mining operations is that they so much energy. The amount of electricity used to mine a single bitcoin could power the average U.S. household for a week. So to ensure that this huge power consumption doesn’t further harm the environment, many mining operations are looking to hydroelectricity to power their hardware.
3.) It should not have strict cryptocurrency regulations
The major driving force behind recent cryptocurrency market drops is that countries are introducing regulation to tighten control over trading. South Korea and France have made headlines in that regard. So it’s important that miners can go somewhere free from legal hassle.
With this in mind, three countries immediately stand out from the crowd: Canada, Scandinavia, and Russia.
Let’s start with Canada. Speaking in an interview with Global News Canada, Cole Diamond, CEO of Coinsquare, believes that “Canada is about to become a central source” of bitcoin. It’s certainly cold, and also has the added benefit of being 63% hydro electricity-powered. Hydro Quebec has already attracted the attention of Chinese mining operations, not only because it provides renewable energy, but because it is cheap. Such is the demand, in fact, that the energy company is struggling to meet it. On the subject of regulation in the country, Diamond is confident that Canada will remain to be a safe haven for miners and users alike: “I don’t think anybody would believe Canada would take an aggressive approach to whether or not mining should be allowed here”, he told Global News.
Onto Scandinavia, which, although pricier, may be even better. Interestingly, Canadian Blockchain firm HIVE (CVE:HIVE) announced earlier this month that it would be placing a $100 million USD mining operation in Sweden. This would be 10 times as big as the one it already operates in Iceland. Preferring to mine in Scandinavia than Canada, HIVE writes that Iceland, for example, not only has an abundance of hydroelectric power but geothermal as well. It is also geographically ideal, serving as a “gateway between North America and Europe”, as they say on their website. Although it is a notoriously expensive place to live, Scandinavia may well attract desperate miners anyway.
Finally, Russia. This may seem like a strange choice, especially considering the Kremlin is hardly stable in its stance towards cryptocurrency regulation. But they haven’t announced anything concrete yet, and it could go either way as the West begins to mull over tighter restrictions. But one thing is for sure; it’s cold and it’s big. Certainly big and cold enough to house plenty of mining farms, and miners are starting to realize this. One such entrepreneur taking advantage of the ‘growing craze’ of cryptocurrency mining in the country is Mr. Dmitry Marinichev, internet adviser to Russian president Vladimir Putin. Marinichev runs a huge mining facility in an old Soviet-era car factory. Long winters in the country help save money on cooling, while electricity is only marginally more expensive than in Canada – a full $0.01 USD more, according to OVO Energy.
Given the number of mining operations there are globally, it certainly doesn’t look like a single country would cope with being a mining hub. But in terms of practicality, Scandinavia, Canada, and Russia may well be the ‘big three’ in future.
Featured Image: twitter