China vs. U.S.: The Battle for Bitcoin Mining Supremacy
The United States and China don’t agree on many issues.
That is not news for anyone with even a slight interest in world affairs. The two largest economies in the world are constantly jostling for supremacy.
In the 4 years of the Trump White House, tensions escalated to levels not seen in decades. How it goes from here is not clear, but no one expects the two countries to be singing Kumbaya into the sunset soon.
Not with what is at stake. Economic and trade might, political views, tech and manufacturing, innovation, and a whole lot more.
Well, now there is another addition to these contentious areas; Bitcoin mining.
China Has Long Had the Advantage
For years, China was the distinct leader in Bitcoin mining. This edge was from both a mining equipment manufacture sense and operational mining rigs.
Chinese miners controlled approximately 70 percent of the total Bitcoin mining hash rate in 2020. The country has cheap electricity in some parts thanks to dams and coal plants that the state built in the past decade.
Electricity is a vital variable in the viability of a Bitcoin mining enterprise.
Many miners look over their shoulders. It is unclear whether the Chinese government will one day crackdown on the miners using cheap power. Mining itself is not illegal, but there are restrictions on crypto trading in the country.
Bitmain gained an edge in supply because it could supply superior products in large quantities. The Antminer series has been the equivalent of the iPhone for Bitcoin mining. Each version of their equipment is popular and viewed as the standard for quality mining equipment.
Accordingly, China has the most Bitcoin mining farms by sheer volumes. Their combined control over the Bitcoin hash rate is more than in other countries.
Many mining farms operate independently in Yunnan, Xinjiang, Inner Mongolia, Sichuan, and even neighboring Mongolia, which has a considerably cooler climate.
North American Bitcoin Miners Now Want a Bigger Share
Bitcoin started 2021 on a hot streak. Prices crossed $30k for the first time and continued all the way past $50,000. Mining is also getting increased attention for all quarters. American miners with deep pockets want a greater share of this sector.
This is not to say that North America had no mining activity before.
VBit Mining has been operational since 2018, professionally hosting and maintaining Bitcoin mining rigs sourced from Bitcoin for clients. Other companies have also done the same in the duration preceding 2020. It is just that the scale and magnitude of investments have gone to another level. China could be seeing a significant fall in its control of the total hash rate for the first time.
Yahoo Finance did a fascinating feature on Miners in the U.S. and China. One of the factories highlighted was a factory in North Carolina that previously made denim for Levi’s. The factory is refitting with dozens of transformers outside for the power that large-scale Bitcoin mining needs.
Business is looking up for these miners, with prices going through the roof in 2021. Russell Cann, who runs the operation, admitted that it is even difficult falling asleep as prices remain high. He is an addition to the massive computing power that’s required to process and record a high volume of cryptocurrency transactions
He is part of a group of miners looking to pour significant capital into Bitcoin mining. American miners are pouring hundreds of millions of dollars to win a larger share of Bitcoin’s processing power. The heavy movement of capital will affect the balance of Bitcoin mining power.
Converting Abandoned Manufacturing Warehouses into Bitcoin Data Centers
The United States also has significant infrastructure that can facilitate Bitcoin mining. Many factories have shut down with the decline of manufacturing. Additionally, there are areas of the U.S. with cheap accessible power.
Russell scans the region for abandoned manufacturing and power facilities to create more Bitcoin mining data centers. The industrial–scale mining mentality is growing in the U.S. Previously, most mining took place in smaller individualized mining operations.
One such company, Core Scientific, has raised close to $100 million in the past few years. Additionally, the company has hired executives from top companies like Microsoft to create an institutional image that is suitable for fundraising.
Most Chinese companies can’t operate this way because they don’t want to have a significant public profile.
They also have power arrangements to handle the latest equipment. One of their data centers is a former carpet manufacturing plant in Georgia. The factory used an elaborate network of chilled water pipes to cool the facility. This fits into the cooling needs of a Bitcoin mining facility.
The Spread of Bitcoin Mining Power Is Positive For the Network
Russell views their role as more than a profit-making venture. This redistribution is also good for Bitcoin. The Chinese government has shown an intention to crack down on some crypto entrepreneurs in the past. Having concentrated mining power in one jurisdiction is not healthy.
The work of American miners entrenches Bitcoin security.
A government cannot ask miners to block certain users from making transactions if computing power is more evenly distributed. The spread of Bitcoin mining power improves Bitcoin’s role as a trustless, borderless, asset.
A battle for Bitcoin mining is now on. Controlling the infrastructure that powers Bitcoin is gaining importance as the asset grows more valuable. The decentralized control of every aspect of the currency is a core tenet. Having mining as widely distributed as possible is positive for Bitcoin.
The surge of American and global miners is a good thing. Bitcoin must remain censorship-resistant to justify its existence.
One advantage that Chinese miners continue to enjoy is their sourcing of equipment. With the majority of mining equipment manufactured in China, American miners have had struggles shipping equipment at a manageable cost.
The rise of institutional investment in Bitcoin may solve this solution. Institutional-scale operations allow the ordering of equipment at scale and with more reliability. The reliability comes because bulk orders usually involve direct orders from the manufacturer.
For instance, a company can order directly from Bitmain without involving middlemen. An individual miner will struggle to get such an order in place and at a sustainable cost. Manufacturers will prioritize large orders, which can bring millions of dollars at a go.
Mine with VBit: A Professional Bitcoin Mining Host and Maintenance Provider
VBit Mining recognizes the need for sourcing quality equipment.
Accordingly, we are a professional equipment reseller with a direct line to Bitmain. This line is useful for sourcing. With the level of demand now, individual miners may find it difficult to get equipment personally.
Russell is only getting started in what we have been doing for three years. VBit Mining has data centers in Colorado,Alberta and Montana to take advantage of cheap renewable power and natural cooling. These variables are useful for the viability of Bitcoin mining.
An individual miner can purchase equipment and take advantage of their reliable hosting services. This arrangement brings a lot of convenience to Bitcoin mining.
Visit the VBit Mining Website to learn more about Bitcoin mining!