According to Cambridge Center for Alternative Finance (1), over 65% of the all hash rate in the world comes from China, which means that one nation owns more than 50% of the total hash rate in the whole world as of March 2021.
How decentralized mining is it for BTC and BCH?
It is not good news for Bitcoin (BTC) and Bitcoin Cash (BCH) holders who wish these two cryptocurrencies as decentralized as possible in terms of hash rate, the computational power which verifies Bitcoin and Bitcoin Cash transactions.
It seems that the two economical powers, the US and China have already started competing with each other in the field of digital mining (2). However, it seems that the bitcoin mining business is growing enormously in China since the mining machines can be operated by inexpensive energy sources in China.
On the other hand, some states in the US introduced some registrations to reduce taxes and attract companies that invest in cryptocurrency mining. And, one of them is Kentucky. According to Kentucky House Bill 230 (3), it states “Create a new section of KRS 139 which defines various terms relating to commercial mining of cryptocurrency using blockchain technology, provides sales and use tax exemptions on the tangible personal property directly used and the electricity used in commercial mining of cryptocurrency as of the date of approved application”.
Interestingly, the Kentucky state also introduced Kentucky Senate Bill 255 (4), which states, “Incentives for Energy-related Business" and include cryptocurrency facilities with a minimum capital investment of one million dollars.”
In other words, they will break taxes for a digital mining company that is interested in opening the business in Kentucky if they invest more than 1M USD.
Kentucky is a part of the rust belt area where many workers are struggling to get a job after many companies introduced automation and also some factories moved their business to China and other parts of the world. Many factories shut down their businesses in the state, and the state lawmakers are hoping to take advantage of reusing these factories which are longer used.
Interestingly enough, Blockware Solution, which is one of the mining companies has already started operating their mining business in Kentucky (6: video).
We will see how the decentralization of the hash rate in the world becomes in the next few years.
In the future, they may report that “American miners become digital miners instead.” Since many miners got lost in Kentucky, may also have a chance to get a job in these digital mining businesses in Kentucky.
Other stories in my blog (As of Mar. 2021)
6 – Cyberpunk!!
1) Bitcoin Mining Map (University of Cambridge)
2) Wall Street Journal (US vs. China: The Battle for Bitcoin Mining Supremacy)
3) Kentucky House Bill 230
4) Kentucky Senate Bill 255
5) Blockware Solutions
6) Blockware Solutions (video)
7) What Happens After the Mines Close? (YouTube)
8) Kentucky Mines