When it comes to Bitcoin mining, there’s no doubt that China is one of the leading countries. However, this could change in the near future. According to Business Insider, Canada is trying to attract mining companies to its shores, as China is about to crackdown on the sector’s energy usage.
It’s all about the costs of the energy needed for mining
The source, citing several industry insiders, reveals that miners are considering relocation after lobbying from the country’s energy industry. To be more specific, we’re talking about Quebec, a territory wooing Bitcoin mining enthusiasts, hoping to boost local economies.
As a start, we have Bitmain, the world’s largest blockchain mining company, who is looking forward to moving its operations to Canada. They also declared that utility company Hydro Quebec is now holding talks with around 30 large crypto miners about potential relocations.
“We’ve seen a lot of movement towards Canada,” said Chris Keshian, CEO of San Francisco-based Apex Token Fund, a fund of crypto hedge funds. “The Canadian government is relatively friendly towards cryptocurrencies [and] energy is relatively cheap there.”
What is this entire mining process?
Even though it may sound complicated at first, Bitcoin mining is actually very simple to explain: computers are completing very complex cryptographic problems, in return for bitcoins. This process is an essential part of the Bitcoin network, as transactions wouldn’t be possible without it.
In order to make sure that transactions are not somehow falsified, participants of the Bitcoin network are required to sign off on transactions in blocks. The latter are recorded in a decentralized database called blockchain.
The blocks are eventually checked and sealed by bitcoin miners, as they do all the cryptographic work. Therefore, as a reward for their efforts, they get bitcoins.
Five of the world’s biggest ‘mining pools’, which dominate more than three quarters of the market, are situated in China. As you can expect, they use ridiculously big amounts of power. Back in 2017, the amount of energy used by computers all over the world for Bitcoin mining was bigger than the annual usage of almost 16 countries!