One of the main pillars of bitcoin’s value proposition is decentralization. Why then does the computer processing power behind the largest cryptocurrency seem to be concentrating again in one place, this time North America? The answer is multifaceted but some of the main reasons come down to where it’s the safest in this geopolitical environment and most profitable for the miners to operate.
This article is part of Bitcoin’s Mining Week series.
Following China’s sweeping crackdown on the country’s crypto industry last year, miners packed up their businesses and fled to other parts of the world, where the geopolitical situation is more stable and cheap power is plentiful. They moved largely to North America, particularly to the U.S.
According to a report released by Cambridge Centre for Alternative Finance (CCAF) in October, the U.S. accounted for 35.4% of Bitcoin’s global computing power, or hashrate, at the end of August, more than doubling the 16.8% share at the end of April. Kazakhstan and Russia followed the U.S. with hashrate shares of 18.1% and 11%, respectively, at that time. Meanwhile, mining operations in mainland China had effectively dropped to zero, down from a high of 75.53% in September 2019.