Cryptocurrencies can be considered disruptive in the world of finance. Blockchain technology allowed users to conduct transactions without third parties. Using a public ledger and miners to confirm the transaction, this concept allowed blockchain technology to become the backbone of the multi-billion dollar crypto industry. However, things have changed over the years. In fact, the geography of crypto mining has changed a lot in just more than a year. In April 2017, University of Cambridge estimates that 60% of major mining pools are in China. The reason for this is due to the cheap electricity as well as cool weather offered by the country.
But that was prior to the regulation changes applied by People’s Bank of China. China raised the bar in order to clampdown crypto-related activities. There are new potential places where they miners prefer to transfer to. You have Kosovo, Iceland, and even Canada as a great choice for miners.
If you will take a closer look at Kosovo, it offers electricity at eight cents per kWh. If you will aks Ermal Sadiku who is a software engineer and crypto expert, “Kosovars find cryptocurrencies an alluring investment”. He added that dirty money is also the reason for its popularity in the country saying that cryptos have the potential to “get rid of” dirty money.
Quebec and Its Allure to Miners
When Quebec announced that it was lifting the ban on crypto miners, officials received a number of requests from Chinese miners. However, the application was immediately paused after being overwhelmed by this number. On Thursday, Hydro-Quebec had a new policy proposal that requires each crypto company to bid for the electricity and prove as well that it requires that amount of energy that it is asking for.
The bidding is said to start at one Canadian cent per kilowatt hour. According to their press release, “The goal of this process is to both maximize economic spinoffs for Quebec and revenue for Hydro-Quebec- in turn pushing electricity rates down for customers”
Given these parameters, it means that crypto miners aren’t exactly going to have access to cheap electricity. It has also been announced that crypto miners are expected to have a different rate compared to other users.
Mining and Environmental Issues
There are many environmental issues surrounding cryptocurrency mining today. In fact, it is said that crypto mining activity is said to use as much CO2 a year as 1 million transatlantic flights. To give you an idea, that is around 20 megatonnes of CO2.
However, it isn’t the only issue that many crypto miners have to face. Another issue that crypto miners have to realize is that the entire crypto market is actually looking bearish. It is even said that if Bitcoin hits $5,000 that crypto miners should already start thinking whether or not they should continue their operations.
Currently, Bitcoin and the rest of the crypto market is showing bearish trends. And it looks like $6,000 is a crucial point of support. Losing more than 50% of its value in 2018, it all becomes trickier on the part of miners.