- The USA is now the largest mining hub in the world, contributing about 35% of Bitcoin’s hashrate
- Russia has overtaken Kazakhstan and has become the second-largest Bitcoin miner in the world.
- The USA is imposing tax limitations on miners due to environmental concerns.
- This might be Russia’s stepping stone in overtaking the USA
Between 65% and 75% of the overall “hash rate,” or processing power, of the Bitcoin network, was formerly held by China, making it the largest Bitcoin mining hub in the world at the time.
According to research from Cambridge University, the nation’s contribution to the world’s bitcoin mining capacity, however, fell to zero in July and August 2021 when authorities renewed their crackdown on crypto mining operations.
China adopted a number of measures, one of which was to ban crypto mining, the resource-intensive procedure that produces new digital currency.
A number of miners left the country as a result, going as far as the United States and Kazakhstan.
In recent times, the USA has become a Bitcoin mining superpower, accounting for about 35 -38% of the Bitcoin network’s total mining hashrate as of 2022, and was closely followed by Kazakhstan (which had a hashrate of 18%).
However, the USA may be on its way to being overtaken.
Russia Becomes Mining Superpower
The Kommersant business daily reported on Friday, that Russia has overtaken Kazakhstan and has become the second-largest Bitcoin miner in the world after the USA.
The USA generates about 3–4 gigawatts of mining power and continues to be the biggest cryptocurrency miner in the world. However, between January and March 2023, Russia’s production capacity has hit 1 gigawatt.
This means that Russia may be very close to overtaking the current Bitcoin mining leader.
Russia’s new mining capacity has done more than bring it closer to the USA.
According to reports, Kazakhstan, which used to be the second place, has now been relegated to the 9th position, after imposing limitations on cryptocurrency mining in 2022.
China at the moment, is not even in the top 10 Bitcoin mining countries.
Russia Hot On USA’s Tail After US Miners Face Higher Taxes
Overall, the tax and regulatory environment that US crypto miners are forced to operate in has lately gotten noticeably less friendly.
The Treasury Department has suggested a 30% excise tax in President Biden’s 2023 budget.
The cost of powering cryptocurrency mining operations is subject to tax, meaning that mining farms would also have to disclose how much power they consume and the sources of that energy.
This means that the USA’s mining power may be on its way to taking a nosedive.
The expansion of digital asset mining, according to the Treasury Department’s “Greenbook,” has a detrimental effect on the environment, and may also drive up energy costs.
Judging by this, it becomes evident that these tax limitations are being put in place to limit the expansion of Bitcoin mining.
All of these add to the possibility of Russia one day overtaking the USA as the latter’s miners flee, in a bid to avoid these restrictions.
Russia Supports Bitcoin Mining
According to recent reports, the Russian government will provide funding for a brand-new 100-megawatt mining facility in eastern Siberia.
The new cryptocurrency farm, which BitRiver is now constructing, will not be subject to land or property taxes and will enjoy a lower income tax rate.
Moreover, 50% of the market price of power will be provided as a subsidy.
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