With cryptocurrency steadily rising and marking itself as a premier asset in the digital arena, the state of crypto mining has flourished alongside it.
According to recent studies, the Global Cryptocurrency Mining Machines Market is poised to grow by USD 2.8 Billion for the periods 2020 - 2024, progressing at a CAGR of 7% during the forecast period.
With such a tremendous leap in such a short timespan, crypto mining secures its position as a critical component in the success of the industry.
Let’s look at the current state of crypto mining.
What is Crypto Mining?
First, let’s understand how the process works. Crypto mining is a process wherein miners earn cryptocurrency without having to undergo a P2P transaction. It involves competing with other miners to solve complex mathematical issues that are then used to verify transactions in the blockchain. The winning miner gets to authorize the transaction and earn crypto. Afterward, the verified transaction gets added to the blockchain ledger, thus stimulating the activity within the industry.
Miners essentially work as auditors and play a key role in preventing a “double-spending” problem, where a user makes a copy of the digital token.
Needless to say, crypto mining is more important than ever as the industry continues to grow and people seek out cryptocurrencies like Bitcoin with Independent Reserve. Back in 2009, Satoshi Nakamoto mined the first few bitcoins with a simple computer. But now, as more people join the webbed crypto network, the algorithms get increasingly more difficult to crack. And that drives technology’s computational power to ramp up to keep up to speed as well.
The Global Landscape of Crypto Mining
China continues to dominate the cryptocurrency mining industry. According to the University of Cambridge’s Bitcoin mining map, China consumes the most average monthly hash rate breakdown by country by a long shot, at 65%. The United States and Russia fall behind in 2nd and 3rd place respectively. China’s dominance is attributed to its inexpensive labor, abundant access to hardware, and low electricity costs.
But the continuous growth of the crypto industry will eventually dwindle the lead of China and introduce new entrants into the market. Third-world countries find an increasing need for cryptocurrency to overturn slow banking processes. Western countries are much more rapidly becoming more aware of the tenacity of Bitcoin to be a part of the center stage.
Regulations of Cryptocurrency
Digital mining regulations have always been fickle. Being strategically positioned in leading jurisdictions in the digital mining industry grants access to renewable energy for the miner — which is of utmost importance for anyone serious about the industry.
Here are the statuses of some regions that regulate digital cryptocurrency mining:
- China. With a regulatory clamp on digital mining due to illegal miners participating in Bitcoin theft, as well as shoddy infrastructure prone to flooding, more and more mining operators turn towards other countries with better geopolitical conditions.
- Eastern Europe. While not exactly a technological hub, Eastern Europe grants miners access to many repurposable industrial sites with solid electricity infrastructure. The Ukrainian government also allows Bitcoin mining without government supervision and intervention - which is a step in the right direction for crypto-miners everywhere.
- North America. Predictable and inexpensive renewable energy propels NA to the forefront of development in the digital currency space. In the US, the Office of the Comptroller of the Currency also reinforced digital currency as valid financial instruments, furthering it into the mainstream financial markets.
The Future of Crypto Mining
It’s evident that digital currency is here to stay and that the future of crypto mining is bright.
As long as a nation continues to promote regulatory stability as well as receptiveness to digital assets, global economies can enjoy economic growth through attracting optimistic investors seeking out an alternative asset, raising the state of financial markets altogether.