Crypto FUD Exposed: Chinese Bitcoin Miners Are Going Broke
Why China mines more Bitcoin than any other country
- Business Insider UK spoke with Garrick Hileman about Bitcoin.
- Hileman explains the best conditions to mine Bitcoin and why certain countries are ideal.
- He then explains why China produces more Bitcoin than any other country.
Business Insider UK spoke with University of Cambridge Research Fellow Garrick Hileman about cryptocurrency mining and the countries that are best suited for it and why China produces the most Bitcoin of any country.
He explains that there are four key ingredients that make the ideal conditions for cryptocurrency mining; low-cost electricity, cold weather, reliable internet and low population density.
Countries like Sweden and Iceland are good examples of this but Hileman says that China has become a haven for cryptocurrency mining.
This is due to its under-utilised infrastructure in provinces like Szechuan where vast amounts of cheap electricity is being produced through coal and hydro-electric dams. These areas are less populated and a lot of this electricity would otherwise go to waste.
Some of these hydro-facilities have even started Bitcoin mining as a way of using the excess electricity that is being generated.
Read the full transcript below.
Garrick Hileman:So, where is cryptocurrency mining taking place today?
Well, it's taking place all over the world but there are certain countries where the four key ingredients - low cost electricity, cold weather, reliable internet and low population density - are more present than others.
So you see a lot of cryptocurrency mining taking place in the far northern hemisphere so countries like Iceland, Sweden, Canada.
You also see cryptocurrency mining taking place in countries like the United States, they have hydroelectric power there that's relatively inexpensive.
But by far and away the country where most of this mining is taking place is China for a couple of reasons. One - and the biggest reason of all - is low-cost electricity or free electricity.
China has very cheap coal-based electricity and also a lot of extra hydro-capacity.
So a number of hydro-facilities in provinces like Szechuan were developed in anticipation of new cities coming online to take advantage of this new inexpensive electricity.
However that electricity is idle, it's not being utilised so many hydro dam operators have gone into the cryptocurrency mining business and I think this is important to keep in mind as we think about the environmental impact of bitcoin.
If that electricity is just going to waste it's already less of a negative externality for bitcoin to be having this excess hydro-capacity used for bitcoin mining.
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