How China Lost Bitcoin's Throne to the US

In August 2012, a young Chinese entrepreneur named Jiang Xinyu posted on the online forum BitcoinTalk calling for people to contribute capital to start a company that produces specialized hardware for Bitcoin mining. Dividends are paid based on income.

Jiang Xinyu is known on the forum as Friedcat. This Chinese entrepreneur is also one of the pioneers in the world to promote the idea of ​​founding companies specializing in Bitcoin mining, similar to ASICMiner. The company name later became a popular concept in the cryptocurrency mining community, referring to the use of specialized machines to "mine Bitcoin".

Jiang Xinyu was eventually charged with fraud for failing to pay or deliver specialized machines to his partners. The company went bankrupt in 2015, Jiang disappeared from the community, but the idea of "mining Bitcoin" with specialized machines lived on. It even sparked a cryptocurrency mining boom in China, which was once considered the "Bitcoin mining factory of the world", with "farms" that were widespread in both size and number.

This is the premise for China to become the world's largest Bitcoin mining "mine". The advantage of cheap electricity and coal prices, mild weather, and little impact from natural disasters has caused the world's largest cryptocurrency mining companies to concentrate. Research by the Cambridge Center for Alternative Finance (CCAF), published in 2021, shows that 70% of the mining capacity (hashrate) of the Bitcoin network is located in China. The Inner Mongolia Autonomous Region once accounted for 8% of the global hashrate, before the local government announced that it would crack down and disband Bitcoin mining mines in March 2021.

Illustration of Bitcoin industry moving from China to the US

PHOTO: SMCP SCREENSHOT

In a short time, China changed its policy and launched a crackdown on Bitcoin mining. From a paradise, this place became a nightmare for miners. Millions of mining machines had to be covered with tarps and "covered". Companies tried to flee China.

At the same time, the US has become a promised land for miners. According to CNBC, after China took tough measures, many US states have made moves to attract Bitcoin miners, especially in New York, Kentucky, Georgia and Texas.

While New York has the advantage of renewable energy and a cold climate that is suitable for Bitcoin mining rigs, Kentucky and Georgia have enacted laws that support the industry, including property tax exemptions. Texas Governor Greg Abbott has said the state needs to “lead the cryptocurrency industry like it did in the gold rush days.”

Experts say that the possibility of changes in China’s regulatory policies makes it difficult for the country to attract new businesses to invest in the cryptocurrency mining industry. The US has an advantage thanks to its slower and more predictable policies.

The result of this shift is that Bitcoin mining farms are gradually moving from China to the US. But Bitcoin's throne is not only about the number of mining farms. The cryptocurrency industry is in turmoil as Donald Trump is re-elected as US President. Bitcoin prices continue to maintain their growth momentum as Trump announces a series of new personnel in the administration, which are considered to have a friendly policy towards cryptocurrency.

While the US is planning to become a “Bitcoin superpower”, China has kept a tight grip on cryptocurrency mining and trading. This has led many to question how China lost its Bitcoin position and how it can regain influence in this super-profitable industry.

Source: https://thanhnien.vn/trung-quoc-vuot-mat-ngoi-vuong-bitcoin-vao-tay-my-nhu-the-nao-185241203115307886.htm