Bitcoin transactions are enabled by so-called bitcoin miners, who are rewarded for digitally checking transaction records with newly minted bitcoins.
China is home to the world’s biggest bitcoin miners but is cracking down on the sector due to concerns about excessive energy usage.
At the same time, Canada is actively courting bitcoin miners as regions like Quebec have excess power capacity.
Other countries like Kazakhstan and Venezuela are also said to be courting miners.
LONDON — Canada is luring bitcoin mining companies to its shores as China, the current global hub of crypto mining, looks to crackdown on the sector’s energy usage.
Several industry sources Business Insider spoke to this week said that bitcoin miners are thinking of moving to Canada after lobbying from the country’s energy industry. Quebec specifically has been wooing bitcoin miners in the hopes of boosting local economies.
Reuters reported on Friday that Bitmain, the world’s biggest blockchain mining company, is looking at moving operations to Canada and said utility company Hydro Quebec is in talks with around 30 large cryptocurrency miners about potential moves. BTC.Top, another major miner, is also setting up shop in Canada.
“We’ve seen a lot of movement towards Canada,” Chris Keshian, the CEO of San Francisco-based Apex Token Fund, a fund of crypto hedge funds, told Business Insider. “The Canadian government is relatively friendly towards cryptocurrencies [and] energy is relatively cheap there.”
Bitcoin mining explained
Bitcoin mining involves computers completing complex cryptographic problems in return for newly “minted” bitcoins. The process, which could theoretically be carried out by anyone, is an essential part of the bitcoin network, allowing transactions to happen.
To ensure transactions are not falsified or records of ownership changed, participants of the bitcoin network must sign off on transactions in “blocks” that are recorded in a decentralized database known as the blockchain. These blocks are checked and sealed by the bitcoin miners, which do the cryptographic work. In return, they are rewarded with bitcoins.
While the system is designed to be decentralized, around 5 large “mining pools” controlled by a handful of companies dominate about 75% of the market. These mining pools, the bulk of which are in China, use huge amounts of power. The amount of energy used by computers “mining” bitcoin last year was greater than the annual usage of almost 160 countries.
The Financial Times reported this week that China is looking to outlaw bitcoin mining due to “concerns of excessive electricity consumption and financial risk.”
Arthur Hayes, the CEO of Hong Kong-based crypto derivatives trading platform BitMEX, told BI: “Some of the people that I’ve spoken to, they’ve been de-risking their Chinese mining exposure in the middle of last year.
“The large miners have been relocating operations around the world in anticipation of a possible crackdown. Miners are cognisant of the fact that they have too much exposure to having operations in China and are relocating equipment and operations to outside of China.”
‘A good parallel would be putting in oil mining rigs’
While China is cracking down, countries like Canada are looking to …read more
Source:: Businessinsider – Tech