One of the main themes among the crypto community in 2021 has been China’s aggressive mining policy, which led to a complete ban on such activities in September.
Although mining as a form of financial activity has not disappeared and probably has not disappeared, cryptocurrency miners in China have had to look for a new place to open a store. Many have moved to the United States – the world’s new mining mecca – while some have moved to Scandinavia and others to neighboring Kazakhstan with cheap electricity.
Mining activity cannot go unnoticed forever, and governments around the world have begun to express concern about power capacity and power outages.
Eric Theden, Vice President of the European Securities and Markets Authority, who is also CEO of the Swedish Financial Supervisory Authority, has called for a ban on the mining of proof-of-work cryptocurrencies such as Bitcoin (BTC) in Europe.
As jurisdictions around the world begin to crack down on mining activities, the question arises: “Where is cryptocurrency mining still profitable and legally viable?”
Related: Looking for a new home: Bitcoin miners stabilize after emigrating from China
It’s no secret that the United States is the top country for cryptocurrency mining, especially in the Lone Star State of Texas. After fleeing China, cryptocurrencies and billions of dollars flowed into the southern state. Much of this has to do with government policies, in which Gov. Greg Abbott has actively supported the bitcoin industry.
Philip Salter, CEO of the mining company Genesis Digital Assets, told Cointelegraph why the state is a popular destination for miners:
“At this time, Texas may be the most popular destination for miners in the world. The large amount of wind and solar energy creates an available surplus of energy. Private networks ensure that new projects are delivered quickly and not held back by slow bureaucracy. But the benefits of Texas “are not so new. Miners started building there many years ago, though not as aggressively as they are now.”
Texas has had its own problems with its power infrastructure, with massive power outages across large parts of the state due to seasonal winter storms in 2021. But miners are relatively familiar with power consumption, and even large companies regularly turn on equipment to prioritize local consumers. and critical infrastructure.
The United States’ northern neighbor, Canada, is also actively attracting mining companies. Alberta authorities recently called for a boycott of miners as they promote cheap electricity prices thanks to the abundance of local natural gas.
Latin American countries make great efforts to attract miners, especially El Salvador shows a positive attitude towards mining. The country was the first in the world to recognize bitcoin as a legal tender. The El Salvadoran government has not hesitated to invest directly in bitcoin and even plans to build a city dedicated to the well-known cryptocurrency, as the electricity needed to extract bitcoin is said to come from geothermal power plants powered by volcanoes.
Costa Rica is also slowly becoming mining-friendly due to lower electricity prices. Mining has reopened a hydropower plant that was closed during the COVID-19 pandemic.
Large crypto companies are also starting to open up businesses in Costa Rica. Chia Network, a blockchain network created by BitTorrent founder Bram Cohen, has agreed to offer technical services for national climate change in Costa Rica.
Argentina was very popular with miners until the government recently decided to cut subsidies to miners and increase taxes on mining. So far, these changes in the fiscal policy of the mining industry are limited to the province of Tierra del Fuego, known for its cold climate. However, Argentina is still a good place for mining farms even after electricity prices have risen, given the energy crisis in competing regions such as Europe.
Mining is still possible in Europe
Mining for cryptocurrencies in Europe is still relatively limited as rising electricity prices in the midst of the energy crisis and a generally skeptical attitude towards cryptocurrencies from regulators make crypto companies think twice before moving to the continent.
In fact, Northern Iceland was once a hotspot for bitcoin mining, with its volcanic subarctic landscape providing cheap electricity and low cooling costs for mining farms.