• This list was compiled from a Cambridge Center for Alternative Finance’s (CCAF) study that measured operational capacity for mining and processing transactions on blockchain or hashrate.

The year 2021 was a great year for growth in all cryptocurrencies. The global crypto boom has inspired hundreds of companies to start mining farms around the globe in countries with better activity conditions.

Cryptocurrencies, in general, are appealing assets not just for investors but also for speculators. The industry is also attractive to miners large and small looking to earn big profits, at a moment when the bitcoin price has nearly doubled within a year.

China was the global epicenter for bitcoin mining from 2019 to the first quarter 2021. The Asian giant was tolerant of bitcoin mining, which grew at unimaginable levels over the past years. More than 75% all global bitcoin mining activity was concentrated by the red dragon.

However, this was ended by the communist government in China who decided to make its own CBDC (central bank currency). Bitcoin mining moved from China to areas with more flexible rules and cheap energy resources.

These are the countries that have the highest Bitcoin hash rate

Because it’s semi-private, it can be difficult to identify where Bitcoin is being exploited most or how many cryptocurrency are created. Only the hashrate can tell you where the most activity in mining of the largest cryptocurrency is taking place.

This allows you to calculate the network’s total capacity to process and mine transactions. This is done by looking at the hashrate to determine which countries have more ASIC processing power. It also helps identify where mining companies operate.

Below is the listing of all 8 countries that produced the highest amount of Bitcoin in 2021. This does not include China. This is the list based upon Cambridge Bitcoin Electricity Consumption Index. The University of Cambridge however clarified that this information is solely based on data collected from various mining pools and geolocated BTC mine facilities.

China

According to Statista data, this country is the global leader of bitcoin mining and has accumulated 75.53%. These levels of mining were maintained until October 2020. The decline of mining was gradual and reached 50% in April 2021, when it was overtaken completely by the U.S.

The global hash rate was around 180 million terahashes/second before the Chinese crackdown in May. China is the biggest hash power source. In that country, two-thirds of all the world’s bitcoins were extracted by using around 86 terawatt-hours (TWh) of electricity.

As bitcoin mining continued to decline dramatically from the end of 2020 and throughout 2021 in China, due to the persecution of mining and all cryptocurrency-related activities, activity grew in the US.

Chinese miners chose to relocate to countries and regions where there were better government and regulatory policies to support their mining activities. Additionally, electricity rates in these countries are better for Bitcoin mining.

Covert mining

However, many miners became trapped in China and were forced to go underground. People with more financial resources or properties in other countries were better able to escape the brutal persecution that started in June 2021.

People who were forced to leave their homes, have dismantled the farms they owned and now operate in smaller units scattered throughout the country. This is not something that was noticed. The most notable exceptions are in areas with significant electricity generation infrastructures such as the Sichuan hydroelectric Dam, which is located to the south.

At the moment, no data is available on Bitcoin mining in this country. However, it is possible that there may be a covert operation that mines bitcoins through virtual private networks. This allows government control to be evaded and leads people to believe the computers are operating from an unknown country.

United States

It was the US’s rebound in mining that led to bitcoin recovery after the Chinese mining pursuit. Although this seemed to be imminent, American miners had prepared for it.

They adjusted the accommodations conditions to mine the bitcoins, even though the Bitcoin price was low. Through large investments, they built huge infrastructures to support the American mining companies for many years.

The data from the Cambridge Center for Alternative Finance shows that most of those who fled China were absorbed by the US. The world’s first economy, it quickly became a global bitcoin mining paradise.

Study of an academic institution shows how hashrate has evolved worldwide. This study highlights the rise and fall of China and Russia as well, beginning in May.

Statista data shows that the U.S. already had a global hashrate of 16.85% by April 2021. It reached 35.4% in four months and has been steadily increasing since then.

Texas is the most bitcoin-exploited state in the United States. The possibility exists that Texas could be the global capital for bitcoin. It has enough electricity and a strong infrastructure. The interests of many cryptocurrency investors as well as young and ambitious executives in the oil industry are converging.

Kazakhstan

According to the Cambridge Center for Alternative Finance, the former Soviet Republic is currently ranked second worldwide in bitcoin mining. It was behind the U.S. Kazakhstan, which had an 18.1% hashrate as of August 2021.

Because of the proximity of Kazakhstan (18.75 million inhabitants) and the infrastructure offered by the government in Central Asia, Chinese miners were able to relocate their mines en masse.

The country faces an energy crisis because of intense mining activity. A lack of electricity is causing constant blackouts for the majority of the country. The 8% increase in national energy consumption this year was above the average 1% to 2%.

Some mining firms that specialize in cryptocurrency have been forced to move their equipment overseas. This is why many bitcoin miners don’t consider Kazakhstan a good place to exploit the cryptocurrency.

The national electricity power grid infrastructure is not helping either. It is difficult to transfer energy from areas that are most resource-rich in the north into areas where there is least energy.

In support of BTC mining which primarily relies on coal burning, the federal government made multimillion-dollar investments in 2019. However, this did not go far enough. To stop the country’s collapse, legislators are now requesting that there be more regulations regarding mining.

Over the next five-years, bitcoin mining taxes revenue was expected to reach close to $1 million. But, due to the current energy shortage, authorities have had to come up with other solutions to offset the problem. One option is to import electrical energy from Russia.

Russia

Russian Federation is another beneficiary of Chinese persecution of bitcoin mining. Russia was close to China so it had access to cheap energy resources such as oil, coal, and hydroelectric. This allowed for the growth and expansion of Russian mining operations this year.

With 11.23% of bitcoin mining, the country ranks third worldwide according to CCAF. Irkutsk is Siberia’s capital city and the one that has accumulated the most bitcoin farms since the China ban.

The region has a lot of natural resources, and it also boasts a huge hydroelectric potential that can power computers needed to mine bitcoin. 20% is actually being used at the moment, according to estimates.

Russia’s location is ideal for bitcoin mining facilities. The cold temperatures also help to conserve energy for cooling interconnected equipment. They work 24 hours per day.

There is a lot of potential for bitcoin mining to grow in Russia. The amount of cheap energy available, coupled with the Russian government’s willingness to host large mining facilities, are a plus for any miner looking for a suitable place to settle.

The ban on BTC in Russia as legal tender is not an impediment to mining growth. In this immense country that occupies a territory of 17.13 million km², the government of Vladimir Putin is in the process of issuing the digital ruble.

Canada

Based on data until July 2018, this area accounts for 9.5% global bitcoin havehrate. Canada therefore is the fourth largest country that has mined bitcoins by 2021.

Canadian and Chinese mining companies have built sheds here. The Canadian hashrate share grew by 0.8% to 3.3% between April 2019 and April 2018. It also declined in China.

Quebec is the region in Canada where Bitcoin is being most widely used. This is due to its climate and abundance of resources. In recent months, Canadian miners confessed that they received joint venture proposals from Chinese companies.

Canadian crypto entrepreneurs are mainly using hydroelectric power for mining bitcoins. They have avoided criticisms for their emissions and overestimated electricity consumption, and they are now able to double their profit.

Between 4.5% to 7% of global bitcoin hash rates is accounted for by the Iranian bitcoin mining sector. The country’s mining sector has grown rapidly since 2017, so the Ayatollah government has been increasing supervision of mining activity.

Although the Iranian regime allows this type of activity because it provides tax dividends to them, there are concerns about the rising energy consumption. Authorities suspect even that some illegal mining is taking place, and that they are not paying appropriate taxes or duties.

Companies that are legally operating in bitcoin mining operations across the country help the government to establish a regulatory framework. This is a way to stop clandestine miners. Iran Mining Association data shows that approximately two-thirds (or more) of BTC mining in Iran are illegal.

Malaysia

The country’s mining industry has seen a significant increase in the last few months. The Cambridge Center for Alternative Finance reports that Malaysia has been expanding its mining network since April 2021.

By July of this year, the country’s monthly global bitcoin hashrate was 4.5%. Some miners that quit their work in China fled to Malaysia and this helped boost the activity.

Since then, the country’s annual energy consumption has grown incessantly. Right now, it’s over 147 terawatt hours. The government has had to step in and take severe action because of illegal mining.

Malaysian authorities are pursuing thousands of illegal miner in Malaysia. Clandestine mining operations have led to the confiscation of thousands of pieces and equipment by the government. They could then sell these items for scrap. Other equipment and encryption systems seized were sold.

Illegal miners not only don’t pay taxes to the government, but they steal electricity to power equipment. Police conduct regular raids of places suspected of having illegally operated mining equipment to avoid this.

Germany

One of the countries with the highest growth in bitcoin mining is Germany, which has the biggest economy in Europe. Germany’s hash rate has also skyrocketed this year. According to CCAF data 4.4% of all global power is used by Germany.

It is unknown if the German mining industry has seen an increase in its capacity. The University of Cambridge reports that the recent increase in the hashrate in Germany may be due to miners using VPNs and proxy servers.

Germany’s income tax on bitcoin mining is 12%. Users who buy cryptocurrency and store them for at least one year do not have to pay tax. Nor if the earnings per sale are less than € 600 per year.

Ireland

Germany’s situation is identical in Ireland. The increased hashrate is believed to be the result of the use of VPN filters to evade the actual location of the mining equipment’s IP address.

According to the map of Bitcoin Cambridge Electricity Consumption Index, there is a 4.6% hash rate. To attract foreign investment however, the Irish government supports activities that use blockchain technology since 2018.

Many mining firms from China moved to Ireland, where they are allowed to operate under state regulation.

Flipside

• It is clear that the nations which mine bitcoin most often in 2021 were not always those where it was received the best and adopted by governments.

What are the reasons to care?
These 8 countries were responsible for the largest number of bitcoin mined in 2021. China is not included in this list, since it has, like we said at the beginning of the article, banned and prosecuted mining to keep it out of competition with the digital currency.

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