Emerging crypto mining hubs around the world
The burgeoning industry of cryptocurrency mining may have seen a drop-off on the back of the crypto winter, but some countries and states are gearing up to be major players despite this. Following China’s blanket ban on the activity, other destinations are taking the nation’s place as prime mining hotspots.
The US has long been the undisputed capital of crypto mining, claiming a majority share of the global hash rate. Although, one state in particular is shaping up to be the largest for the activity. Texas accounts for around 25 per cent of the nation’s total cryptocurrency mining output, in part due to its relatively inexpensive energy and favourable regulatory setup.
In June of 2021, the state ruled that banks can offer custody services for digital assets, and crypto can be used as collateral for loans.
More recently, the Switzerland-based mining company White Rock Management said it will be expanding its efforts to North America, starting with Texas. The firm’s US operations will reportedly have an initial capacity of 3 megawatts, and a total hash rate aiming over 1.6 EH/s.
A close second to Texas is Kentucky, which is home to around 20 per cent of the country’s crypto mining operations. Interest in the space saw a surge after the passing of Senate Bill 255 and House Bill 230 in March of 2021, which incentivized commercial mining in the state.
Despite disruptions from the ongoing war with Ukraine, Russia is still a contender for one of the top crypto mining hotspots. In fact, the conflict may have bolstered operations, as Russian energy majors like Gazpromneft turn to new ways of exploiting natural resources.
On the back of the oil giant’s partnership with miner BitRiver, Russia is using its CO2 to power a massive crypto mining farm.
Additionally, regulation for the digital asset sector seems to be on the horizon, as leading politicians, alongside the Ministry of Energy, are voicing their support for mining. Kirill Pronin, head of the Russian Central Bank (CBR)’s fintech department, has confirmed the possibility of legalisation, provided the mined assets are sold abroad to avoid the domestic adoption of crypto and its impacts on the financial system.
Like Russia, the central Asian nation is well-positioned for mining thanks to its vast expanse of land and cheap electricity. Crypto companies operating in Kazakhstan have been able to keep costs down by buying land at auction from the government and securing long-term deals with local energy providers, like KEGOC.
The country itself has also collected big earnings from crypto mining – $1.5 million in fees in the first quarter of this year alone.
Despite challenges including an Internet outage, a carbon-intensive energy infrastructure, and an unpopular crypto mining tax policy, the industry continues to be a lifeline for the economy.
Kazakhstan claims the title of the world’s third-largest Bitcoin miner, as it accounts for 13.3 per cent of the global hash rate. According to reports, Income from these operations comes from 12 different areas of the country.
Under the adopted law, workers are required to pay a share of their energy expenditures to the government – $0.0024 per kilowatt on the 20th day of the final month of each quarter. This cost is currently being debated by parliament.
The African nation of Kenya is making efforts to attract crypto miners through its renewable energy sources. In a bid to shift to more sustainable operations, the country now offers industry players a green energy source with a lower carbon footprint.
Kenya may be on track to becoming the leading producer of thermal energy in Africa, with a supply capacity of around 863 MW. What’s more, according to experts, the country’s energy potential may be closer to 10,000 MW.
Although Kenya does not yet host miners on its territory, energy majors like KenGen are working to change this. The company is looking to establish mining farms in an energy park nearby its geothermal plant in Olkaria.
86 per cent of KenGen’s energy is reportedly derived from renewable sources, including hydro and wind, and there is a surplus of this energy, which is a big green flag for Kenya’s cryptocurrency mining future.