From Texas to Kazakhstan, the Bitcoin mining industry is booming after China’s ban forced many to move to friendlier destinations. Here are the world’s hottest mining destinations.
In this article, we will examine the hottest spots for mining crypto, and discuss how certain factors — including regulations, energy prices, sustainability and infrastructure — make or break a lucrative Bitcoin mining hotspot.
Join us in showcasing the cryptocurrency revolution, one newsletter at a time. Subscribe now to get daily news and market updates right to your inbox, along with our millions of other subscribers (that’s right, millions love us!) — what are you waiting for?
What Is Bitcoin Mining?
Bitcoin Hash Distribution Rates
However, the great China FUD of 2021 — the banning of mining in the PRC — proved to be a blessing in disguise for BTC as it forced its miners to relocate to more democratic locales with less government intervention. As of April 2021, China represented just 46% of Bitcoin mining, and by December 2021, this number is now 0%.
China Bans Crypto
Let’s quickly recap the great China FUD of 2021, as the year’s on its last legs.
Despite causing a temporary drop in the price of Bitcoin (and other altcoins), the move has largely yielded positive results for crypto enthusiasts outside of China, where it is stimulating economies and driving innovation.
What Factors Make a Location Ideal for Crypto Mining?
Several factors can make a particular location desirable for mining.
Stable, consistent and favorable government policies;
A capacity for innovation and a willingness to embrace the future/
Coin mining is a low-margin enterprise with energy as the primary variable ;
Comparatively cheap energy sources incentivize crypto mining.
Many locations on this list have reliable, stable power grids;
Many of these locations leverage/provide wind turbines, solar and hydroelectric resources/
Bitcoin mining requires stable power supplies and ventilated spaces that can support ASICs racks.
Locations with vacant and affordable industrial spaces — like those found in the American Rust Belt — are perfect.
Reasonable Government Policies
Political stability facilitates investment. Smart business people are more likely to invest in locations with favorable policies and outlooks towards their industry.
Politically stable regions;
Locations with reasonable, consistent government policies towards crypto mining and FDI.
A Willingness to Embrace Innovation
What Are the World’s Top 10 Crypto Mining Hubs?
Without further adieu, let's dive in. Here are some of the best crypto and Bitcoin mining hubs right now.
Everything’s bigger in Texas — including the mining industry. Texas has struck digital oil. Metaphors abound!
Likewise, tens of thousands of ASICs, a technology used to mint new Bitcoin, are being delivered in massive quantities to the region.
This is because Texas ticks almost every box on the list of attributes desirable for crypto mining.
Texas boasts a crypto-friendly regulatory environment and is located in a politically stable country;
- While not ideal during blizzards, Texas has a deregulated power grid with real-time spot pricing;
Texas has access to several sources of affordable energy — including significant renewable resources and stranded/flared natural gas.
The regulatory environment in Texas lends a level of predictability to mining previously unachievable in China. Tellingly, there are numerous land deals and purchase agreements related to crypto being processed by the state.
Likewise, flexible energy policies enable miners to plug directly into the grid. In addition, cheap energy prices — at just USD$2.8 cents per kW-hour! — draw from sustainable solar sources. Similarly, many natural gas facilities in Texas leverage flaring technology, which produces far fewer emissions.
Texas' deregulated grid also enables miners to benefit from spot pricing schemes that allow them to quit purchasing electricity if prices get too high.
New York, USA
Operated by Coinmint and powered by wind turbines and dams on the St. Lawrence River, the Massena mining facility is built into a former disused aluminum smelter.
Like Texas, New York is ripe for crypto mining:
New York has (at present at least!) relatively friendly policies towards cryptocurrency;
New York’s cold climate and plethora of empty factory spaces are ideal for mining crypto;
Renewable (if slightly expensive) energy resources.
At present, the regulatory situation in the state is favorable toward crypto enterprises. Despite this, the state is mulling a three-year ban on crypto mining while it assesses the potential environmental consequences of the industry. This is unlikely to come to fruition, as much of the energy used comes from renewable resources.
Kentucky, a state formerly famous for mining coal, is another up and comer in the American crypto mining game. Indeed, it handles a whopping 18.7% of America’s total hashrate.
- Kentucky’s present governor is a friend to the industry and has passed laws granting tax exemptions to mining operations
The region is known for its sustainable energy resources — generated via hydroelectric dams and wind turbines
The region boasts low energy prices, abundant human resources, and unused industrial spaces
Elements of the state’s government even mulled allowing citizens to pay taxes in crypto.
Russia is now the world’s third-biggest Bitcoin mining nation after the United States and Kazakhstan, and has absorbed a fair share of China’s exodus of miners this year.
Johannesburg, South Africa
South Africa’s economic hub, Johannesburg — also referred to as Egoli, the place of gold, for its gold rush heydays, business sector and access to Africa — is adding crypto mining to its list of industries. Interestingly, Joburg does not meet the typical qualification for a crypto mining hub.
South Africa has a famously unreliable power grid that endures regular blackouts;
A well-documented history of recent political instability and labor union issues.
Despite this, it makes the list for its innovative approaches to crypto. For example, a mine run by Libertas produces 30 coins a day using solar power, making it one of the most profitable mines in the world.. SA has no shortage of UV rays, and business at this off-the-grid crypto enterprise is thriving and producing a compelling roadmap for other sunsoaked countries.
Like Joburg, this beautiful coastal city makes the list because of its attitudes toward innovation.
Indeed, North Vancouver recently announced that it would attempt to become the first city heated by cryptocurrency mining. This kills several birds with one stone. By converting the heat generated by Bitcoin, it further reduces energy costs and while attracting business to the city. It tackles climate change, creates heat energy and mines crypto simultaneously.
Many of Bukele’s projects are still in their early stages and stand a good chance of failure. However, should he deliver on his promises, El Salvador will become a world leader in the crypto sphere, and check numerous boxes on our checklist — with sustainably, geothermally powered mining, favorable policies and the mass adoption of Bitcoin wallets.
Despite this, El Salvador is included on this list for its willingness to innovate, take risks and embrace the future.
Following the Chinese ban, many Chinese mining firms moved their operations to Kazakhstan. Tellingly, the Central Asia state had an 18.1% share of Bitcoin’s hashrate in August 2021. The country boasts cheap energy prices, but has several disadvantages that gets it a spot on this list as a cautionary tale of how not to mine Bitcoin.
- The country’s mining boom has caused power outages, which have created political instability;
Almost all of the Kazakhstan’s energy is made from extremely dirty coal plants/
But with cheap and sustainable energy set to become an increasingly precious commodity, we cannot discount a possible surge back to the top for Iceland and other Scandinavian nations, especially if Bitcoin’s price takes a cooling that disincentivizes mining elsewhere.
After surveying this list, it would be easy to declare New York as the hottest Bitcoin hub on earth. Despite this, lessons from China have taught us that oppressive regulatory policies drive innovation away, and New York's environmental policies may come back to bite them. While not the leader in hashrate, Texas has established the best footing for a Bitcoin boom. Indeed, they check every box.
The clear winner is this modern gold rush is the consumer and the environment. Bitcoin’s exodus from China and migration towards environmentally sustainable energy sources lends credibility to Bitcoin, protects the consumer and will continue to make a lot of Americans, Canadians, Russians and South Africans (and yes, those miners in your country) a lot of money.