US Largest Bitcoin Producer After Chinese Crypto Market Collapse

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The United States has taken over from China as the largest “producer” of bitcoins. Previously, powerful computer systems in the Asian country accounted for most of the bitcoins arriving worldwide.

 

But the Chinese government is increasingly cracking down on the crypto market, which means that the country barely contributes to the worldwide amount of crypto coins, according to the Cambridge Center for Alternative Finance.

Like other cryptocurrencies, Bitcoins are traded via a blockchain, a kind of decentralized order book that is updated everywhere at once. In order to adapt each addition anywhere in the network, a complicated mathematical formula has to be solved. Whoever succeeds will receive a bitcoin as a reward. This is called “mining” or mining bitcoins.

Entrepreneurs worldwide have been using special computer systems day and night to calculate bitcoins. The largest miners were in China, where they took advantage of the low prices for the massive amounts of electricity needed to mine bitcoins. But this year, the People’s Republic is working on its ban on bitcoin and related activities. For example, provinces announced a ban, and authorities stepped up their controls.

That fight against Chinese miners is bearing fruit. Where in September 2019, China still accounted for 75 percent of all computing power used worldwide for mining bitcoins; according to the Cambridge Center for Alternative Finance, this has fallen to almost nothing. The United States’ share rose to 35.4 percent, more than doubling from April.

Chinese miners may still be active in their own country but hide behind shielded virtual private networks (VPN). They make it appear as if computer systems are located elsewhere. According to the researchers, a recent increase in the computing power for bitcoins in Germany and Ireland may result from VPNs from bitcoin miners.

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