Cryptocurrency mining is one of the fundamental pillars of the crypto world. Being the basis for the operation of the blockchain, and therefore the crypto world in general. However, it is a very expensive process, due to the great electrical consumption that it implies. Making few places where this activity is profitable as a business, including Texas and Russia.
The importance of mining
In CriptoTendencia we have analyzed in many occasions the importance of mining for the operation of Blockchain technology. Since, since block chains are a distributed and decentralized database, beyond the control of any entity or organization. It requires the active participation of its users to keep it running.
Thus, the computing power that allows the realization of operations within this system, would come from the users themselves. Who would lend the processing capacity of their equipment, in exchange for a monetary reward in the form of cryptocurrency tokens. Avoiding in this way the need to hire private servers, who become owners in practical terms of the data on the network.
However, and despite the seemingly round operation of this system. The truth is that it has a serious problem, especially when it comes to Bitcoin mining. Well, the transaction setting of this cryptocurrency has a high cost in energy resources.
Therefore, so that this activity is profitable for those who are dedicated to it. It has to be done in countries whose electricity service has moderate costs, and therefore allows a profit once the Bitcoin obtained through mining is sold.
New competitors in the sector
Thus, until recently, only some countries were profitable for mining activities. Either because the costs of electricity are very low, as is the case in countries like Venezuela, allowing Bitcoin mining to be done on a small scale. Or countries like China, where conditions make large-scale mining a business feasible activity.
However, this is not a static market, as several countries try to offer mining companies enough incentives to be installed in their territory. Bringing all his knowledge in Blockchain technology, as well as the profits that mining activity generates for companies and society in general.
For this reason, and as we review here in Crypto Trend, there would be American states like Texas that are becoming one of the best places for cryptoactive mining. Thanks to the reduced cost of electric power in the state, one of the largest wind energy products. What, would be leading companies like Layer1 Technologies, to repatriate up to 30% of its operations to the United States.
Also, in other countries such as Russia, cryptoactive mining companies are leveraging infrastructure from Soviet factories. Which are close to energy production centers, and in places with low temperatures, which saves costs in the cooling of mining machines.
Thus, and despite China’s traditional hegemony in the cryptocurrency mining sector. Competitors are emerging that, thanks to their ability to offer electricity at low costs, and regulatory facilities for crypto companies, have managed to start competing in such an important sector as mining. What makes this our Today’s Data here at CriptoTendencia.