The popularity of bitcoin (BTC) mining is on a rise again during the first half of 2019. As of the 5th of July 2019, the hash rate of the Bitcoin network was around 74 quintillion hashes per second. To give a better idea of how big this number is: that is 74 followed by 18 zeros. In other words, bitcoin mining is on a rise again. However, it is still subject to regulations. Each country has their own regulations of which some are crypto-friendly, and some are less friendly for this emerging industry. In this article we will take a quick look at different countries in the world and their regulations in regards to cryptocurrency mining.
The Czech Republic is one of the countries that is known to be crypto-friendly. As a result, it is the home base of one of the biggest mining pools in the world, Slushpool. This mining pool provides around 7% of the total hash power of the Bitcoin network, and is therefore a big player. This is possible thanks to the fact that the government of the country pursues a relaxed policy when it comes to bitcoin and bitcoin mining. Cryptocurrency is legal, as is bitcoin mining itself. This relaxed stance gave the Czech Republic the image of a crypto-friendly country.
Another European country known to be crypto-friendly is Iceland. The island, all the way up north in the middle of the big pond, is known to have an abundance of green energy. The reason for this is that there is a lot of volcanic activity. In one of our earlier blog posts you can read that Iceland is among the countries that host most crypto miners due to its location and the abundance of green energy. Crypto mining in Iceland is so big that it is expected that the energy used by miners will grow past the energy consumed by households in the country. Due to the fact that also the Icelandic government is relaxed towards cryptocurrencies, crypto mining gained a lot of ground in the country.
The United States of America
The development of regulations for cryptocurrencies in the United States happens slowly. Although the Commodity Futures Trading Commission (CFTC) already classified bitcoin as a commodity in 2015, new regulations that significantly impact cryptocurrencies or mining haven’t been implemented as of yet. However, in the beginning of 2018, one city in New York, Plattsburgh, banned cryptocurrency mining for a period of 18 months. This was due to the fact that citizens saw their energy bills rise as a result of crypto miners. The city mainly gets its electricity from a hydro dam of which the costs rose as demand was on the rise as a result of miners using the cheap electricity. Apart from this short ban, crypto mining is very big in the US, partly due to the lack of clear regulation of the industry. In the near future the landscape might change as several Senators have proposed new bills to regulate the industry in better manner.
China is an absolute giant in the cryptocurrency mining industry. More than 70% of the hash-power is generated in this country, and it is the home of Bitmain, the manufacturer of some of the best ASIC miners. The reason China is so big in crypto mining is that also here there is a huge surplus of electricity. Local governments stimulate people to use this extra energy by mining cryptocurrencies to earn an extra buck.
However, in 2019, the government proposed new regulations. If these proposals are accepted, crypto mining will be banned altogether in the country as it uses too much energy according to this proposal. This would obviously have a huge impact on the crypto industry in the country. According to several reports, miners are already looking for new locations in the world where they can settle. It is therefore not sure if China remains the biggest powerhouse in crypto mining in the future.
Some countries, like China, might want to ban bitcoin mining as it uses a lot of energy. While it is true that bitcoin mining, and cryptocurrency mining in general, use a lot of electricity, the impact it has on our climate might be lower than some might think. Since most miners choose locations where there is surplus of resources as this energy is the cheapest in general, most miners can be found in areas where a lot of green energy is produced. Most of these renewable energy sources cannot be turned off; think of rivers or wind turbines for instance. This leads to a surplus in energy during certain times of the day like we see in China or Iceland, which means these countries have cheaper electricity. In our previous blog post, which you can find here, you can read more about bitcoin miners using mostly green energy.