The long sheds at North America’s largest bitcoin mine look endless in the Texas sun, packed with the type of machines that have helped the US to become the new global hub for the digital currency.
The operation in the quiet town of Rockdale was part of a bustling US business that received a boost from Beijing’s intensified cryptocurrency crackdown, which pushed the industry westward.
Experts say that the rule of law and cheap electricity in the US are a draw for bitcoin miners, whose energy-gulping computers race to unlock units of the currency.
Photo: AFP
“There are a lot of competitors coming into Texas because they are seeing the same thing [as] when we came here,” said Chad Everett Harris, CEO of miner Whinstone, which operates the Rockdale site owned by US company Riot Blockchain.
China was the undisputed heartland of cryptocurrency mining, with about two-thirds of the global capacity in September 2019, but last month, Beijing declared illegal all transactions involving cryptocurrency, as it seeks to launch one of its own.
Figures released on Wednesday by the University of Cambridge showed that activity in the US more than doubled in the four months to the end of August, increasing the market share held by the world’s biggest economy to 35.4 percent.
Samir Tabar, chief strategy officer at miner Bit Digital, said that the company started to pull out of China last year and accelerated that process as the crackdown intensified.
The firm has operations in the US and Canada.
“China’s bitcoin mining ban was basically an unintentional gift to the US,” he said. “Thanks to their ban, an entire sector migrated to North America — along with innovation, labor and machines.”
Some of the key pulls toward the US are simply a democratic government, a court system and the power to protect property rights.
“If you’re going to make long-term investments and accumulate wealth in a country, you want to have some confidence that it’s not going to be taken away by the government,” said David Yermack, a cryptocurrency expert at New York University.
He expected the shift to the US to be temporary, saying that places like Nordic countries have cheap and abundant renewable energy, as well as plenty of cold weather to cool the hot-running mining machines.
The steady increase in US-based mining operations has fanned the ongoing environmental criticisms of the industry’s massive annual electricity consumption — more than what the Philippines uses in a year, Cambridge University data showed.
An ongoing backlash has been fueled by concerns that the industry relies on carbon-emitting power sources that contribute to climate change.
“To think that we’re causing harm or pollution or all those things here... The majority of our power comes out of the ERCOT grid and that profile is extremely friendly to the environment,” Harris said, referring to the Texas power network operator.
According to ERCOT’s data for last year, about 46 percent of its power came from natural gas, while wind and solar combined for 25 percent, with coal at 18 percent.
The price miners pay for electricity is key, and a place like Texas is desirable because the market is deregulated, so companies can have more flexible terms, Georgetown University business school professor Viktoriya Zotova said.
“In principle, they can buy the electricity when it’s cheaper and not buy it when it’s more expensive,” she said.
While there are obvious reasons for the cryptocurrency world’s migration, some also see a bit of poetry in mining operations coming to the US from China.
Tabar said that Bit Digital has a site in Buffalo, New York, which used to be one of the country’s main manufacturing hubs, but lost jobs and prosperity as production work shifted to places like China.
“There is a bit of a poetic thing going on — it dawned on me how this is going full circle,” he said.
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
Nearly half of China’s major cities are suffering “moderate to severe” levels of subsidence, putting millions of people at risk of flooding, especially as sea levels rise, according to a study of nationwide satellite data released yesterday. The authors of the paper, published by the journal Science, found that 45 percent of China’s urban land was sinking faster than 3mm per year, with 16 percent at more than 10mm per year, driven not only by declining water tables, but also the sheer weight of the built environment. With China’s urban population already in excess of 900 million people, “even a small portion
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese