China is the crypto mining leader of the world and has been unchallenged for the past five years. According to data that was complied by researchers at Cambridge Centre for Alternative Finance, China is the home of the biggest equipment manufacturers and accounts for 65% of the global bitcoin hashrate.
There are claims that Chinese crypto miners are going to America to avoid regulations. Industry sources say that China-based miners have no intentions of moving their operations to North America although there are signs that industry is preparing to start off. The question however is whether the crypto mining industry will flourish in North America.
Silbert’s US-based bitcoin group DCG believes that it can. Last August DCG announced that it has made a commitment to invest $100 million in Foundry throughout 2021. Foundry is a crypto mining investment company based in upstate New York. The company wants to challenge the dominance of China in the crypto mining industry.
Foundry is planning to build crypto mining operations and finance other companies to do the same in North America. However, it is not only Foundry that wants to challenge China; Kazakhstan and Iran are also making moves to support the industry. Foundry might get support from Washington through the centralization of the $215 billion bitcoin network.
Meanwhile, Foundry’s newly appointed CEO, Mike Colyer is concerned about the centralization because it is essentially about security which is not specific to China. Centralization is not about North America vs. China or US vs. China; it is about strengthening decentralization and the security of bitcoin network.
The bitcoin network is vulnerable to a 51% attack wherein majority of miners can use their collective hashpower to take over the control of a network. Transactions on a bitcoin ledger rely on the consensus of the majority of users and not on a single authority.
In an op-ed that was published in August, Ripple CEO Chris Larsen said that bitcoin crypto mining is concentrated in China which means that the Chinese government has the majority that would be needed to control protocols and effectively block or reverse transactions. However, China-based miners are fed up with regulations and are planning to move out.