‘Unintentional giveaway’: US tackles China’s bitcoin breach

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Published on: 10/17/2021 – 05:12 Modified: 10/17/2021 – 05:10

Rockdale (United States) (AFP)

The long hangars of North America’s largest bitcoin mine seem endless in sunny Texas, filled with the kind of machines that have helped the United States become the world’s new digital currency hub.

The operation in the quiet town of Rockdale was part of an already bustling U.S. enterprise – now spurred by the escalating crypto crackdown from Beijing that has pushed the industry west.

Experts say the rule of law and cheap electricity in the United States attract bitcoin miners, whose power-hungry computers rush to unlock units of the currency.

“There are a lot of competitors who come to Texas because they see the same thing (like) when we came here,” said Chad Everett Harris, CEO of Miner Whinstone, which operates the company-owned Rockdale site. American Riot Blockchain.

China was the undisputed heart of crypto mining with around two-thirds of the world’s capacity as of September 2019, but last month Beijing declared all transactions involving crypto money illegal as it seeks to launch. one of his own.

A worker fills out a form at the Whinstone US Bitcoin mining facility in Rockdale, Texas on October 10, 2021 Mark Felix AFP

Figures released by Cambridge University on Wednesday showed activity in the United States more than doubled in the four months to the end of August, bringing the market share held by the world’s largest economy to 35.4 %.

Samir Tabar, chief strategy officer at miner Bit Digital, said the company started pulling out of China in 2020 and accelerated that process as the crackdown intensified. They have operations in the United States and Canada.

“China’s ban on bitcoin mining was essentially an unintentional giveaway to the United States,” he said. “With their ban, a whole industry has migrated to North America, along with innovation, manpower and machinery.”

Some of the major assets to the United States are simply a democratic government, a judiciary, and the power to protect property rights.

“If you want to make long-term investments and build wealth in a country, you want to have some assurance that it won’t be removed by the government,” said David Yermack, a crypto expert at the University of New York. York.

– “Poetic” return to America –

He expected the move to the United States to be temporary, saying places like the Nordic countries have cheap and plentiful renewables, as well as plenty of cold weather to cool hot-running mining machines. .

Whinstone CEO Chad Harris poses for a portrait in a room with bitcoin mining machines during a tour of the Whinstone US Bitcoin mining facility in Rockdale, Texas on October 10, 2021 Mark Felix AFP

The steady increase in US-based mining operations has fueled ongoing environmental criticism of the industry’s massive annual electricity consumption – more than the Philippines uses in a year, according to University data. from Cambridge.

A continued backlash has been fueled by concerns that the industry is relying on carbon-emitting energy sources that contribute to climate change.

“To think we’re causing damage or pollution or all of those things here… the majority of our electricity comes from the ERCOT grid and that profile is extremely environmentally friendly,” Harris said, referring to the Texas power grid. operator.

According to ERCOT data for 2020, around 46% of its electricity came from natural gas, while wind and solar combined 25% with coal at 18%.

The price miners pay for electricity is critical, and a place like Texas is desirable because the market is deregulated so companies can have more flexible terms, said Viktoriya Zotova, a business school teacher at the ‘Georgetown University.

“In principle, they can buy electricity when it is cheaper and not buy it when it is more expensive,” she said.

A deserted street in downtown Rockdale, Texas, October 9, 2021 Mark Felix AFP

While there are obvious reasons for the migration of the crypto world, some also see a bit of poetry in the mining operations coming from China to the United States.

Tabar, of the Bit Digital miner, said his company had a site in Buffalo, New York, which was one of the country’s major manufacturing centers, but lost jobs and prosperity as production work s ‘is being moved to places like China.

“There is a bit of poetry going on,” he noted. “I realized that the circle was closed.”

AFP 2021

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