America Dominates Bitcoin Market: Bans in China drive all cryptocurrencies out of the country

In September 2019, miners in China accounted for 75% of the total Bitcoin coin mining activity, and after the measures introduced by the Chinese government, the USA now becomes dominant with more than a third of the total power of the Bitcoin network.

Following the introduction of initial restrictive measures against Bitcoin miners in China, it was rumored that large mining farms were looking for a new location, in order to continue mining in peace.

Texas and Kazakhstan were in the story, as the most serious options.

Liberal Texas for BTC mining

Texas is known for liberal regulations for working with cryptocurrencies, as well as low electricity prices, which are two very important items when it comes to choosing a location for a new crypto-farm.

On the other hand, Kazakhstan is the most logistically logical choice, because it is a direct neighbor of China, and it has a large number of thermal power plants that rely on coal, which means a low price of electricity.

According to the Cambridge Bitcoin Consumption Index(CBECI), Bitcoin miners in the U.S. make up 35.4% of the total global BTC hash rate distribution.

According to the same source, Kazakhstan is second with 18%, followed by Russia with 11%, as a new player, whose market share is growing.

In essence, these three nations have achieved the largest market share since China imposed serious restrictions.

Mass migrations of miners

In June, in the midst of restrictions, the fifth-largest crypto-community of miners(mining pool) BTC.com left the territory of China and moved its business to Kazakhstan.

At that time, BTC.com accounted for 10.4% of the total validation of Bitcoin blockchain blocks.

It is also interesting that the CBECI index shows that the percentage of Chinese miners has dropped to 0%, which is simply unbelievable.

Given such a large number of miners, we are pretty sure that there is a good percentage of those who still mine Bitcoin, but below the radar.

Of course, one should be careful, because China, and realistically, no other country in the world looks favorably on those who do not respect the law, so the Malaysian police have confiscated more than a $1.3 million cryptocurrency digging machine.

In addition to the large migration of crypto-miners from China to the United States, American miners such as Argo Blockchain, Riot Blockchain, Marathon, and many others took advantage of the situation and bought large quantities of mining rigs from Bitmain and MicroBT, which regularly supplied the Chinese market.

In 2021, the aforementioned Riot Blockchain tripled its capacity from 2,457 Bitcoin coins excavated in 10 months.

Ohio and Texas as main oases

In addition to Texas, another potential destination is the state of Ohio, also due to the popular price of electricity, as well as the fact that BIT Mining, a company specializing in Bitcoin mining, has entered into a joint project to build a huge plant for 85 megawatt Bitcoin companies, with Viking Data Centers, which are developing data centers focused on crypto miners and the necessary infrastructure.

In this way, not only will Ohio get a large Bitcoin mining facility, but it will also provide the necessary infrastructure for all those interested.

The shady history of the Upbit crypto exchange

Upbit is a crypto exchange from South Korea that launched on October 24, 2017.

The company was led by Chi-Hyung Song, the CEO of the company, and Sirgoo Lee, who was the CEO of Dunamu, the parent company.

Not long after, the Upbit exchange started receiving a very high trading volume, positioning among the top 10 crypto exchanges in the world based on 24h trading volume.

Also as a part of their efforts, they received certifications from Korea Internet and Security Agency for Information Security Management System(ISMS).

However, not all went great.

The first raid on Upbit

On May 10, 2018, the main office of Upbit was raided due to fraud allegations.

KIU, FSC, and Seoul Police entered the offices of Upbit at 10 AM, suspecting that Upbit doesn’t hold the quantity of funds it reported.

The Upbit team however published their own audit, trying to clear the suspicion of fraud from their names.

A formal charge of Upbit executives

On December 21, 2018, 3 executives from Upbit got charged by the South Korean prosecutors.

The executives allegedly made fraudulent transactions in 2017, making fake orders totaling around $226.2 billion.

It was suspected that they did this in order to fake the trading volume of the Upbit exchange, thus attracting more users to their platform.

Apart from that, they got accused of selling 11,550 Bitcoins(worth around $120 million) to their customers at inflated prices.

The prosecutors asked for a 7 year fine in prison for the Upbit executives, as well as to order them to pay around 1 billion WON.

A clearing of fraud from Upbit

However, on January 2, 2020, the charges got dismissed on the grounds of lack of evidence.

Even though prosecutors accused Upbit of creating fake orders and inflating prices, Deputy Judge Oh Sang-Yong dismissed the case based on a lack of evidence to support the prosecutor’s story.

The Upbit Ethereum hack

On November 27, 2019, Upbit lost 342,000 ETH, worth about $48 million.

The funds were, over a single transaction, transferred to an Ethereum wallet with the address of 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029.

The investigation has later shown around 815 wallets trying to cash out the funds, mostly through Bitmax, Binance, Okex, and Huobi exchnages.

Of course, the exchanges like Binance managed to identify and freeze many of the hacker funds, however not all of them got recovered.

Excavated Almost 90% of Bitcoin – What fate will befall the crypto-economy?

Bitcoin, the world’s largest and most famous cryptocurrency, has a limited supply of 21 million coins, with almost 90 percent of them already mined.

Analysts are already considering what fate will befall the crypto-economy once new coins are not issued.

Unlike other forms of money, including decree money, which can be printed at the will of central banks, Bitcoin has a limited supply of 21 million coins.

This means that there is or will be a total of only 21 million Bitcoins.

By August 2021, approximately 18.7 million Bitcoins were available, and only 2.3 million remained for mining, according to Investopedia data.

Supply restraint makes the world’s oldest cryptocurrency a restricted commodity and controls inflation that could otherwise result from an unlimited supply of coins.

Also, such a situation leads to an estimate that the year 2,140 will be the time when the last Bitcoin will be mined.

If this is taken into account, the question arises whether the Bitcoin network will remain functional even after that time.

Analysts say that the economy of Bitcoin must change in order for the network to remain operational.

Many predict that the cryptocurrency ecosystem could go through a process of transformation, just like its identity.

It was originally introduced as a medium of exchange for daily transactions but later found greater popularity as a means of investment.

Analysts also say that those who mine Bitcoins could join cartels, similar to those that control other commodities, such as the Organization of the Petroleum Exporting Countries (OPEC), which controls the oil market.

Another possibility presented by analysts is that Bitcoin could become a reserve asset, which would reduce the number of transactions on the crypto network because retailers and small trading companies would be replaced by large institutional and trading players.

They would run a smaller number of larger transactions, which would extend the time to find the last Bitcoin.

Finally, the protocol that applies to cryptocurrency can be changed to extend production once it reaches the 21 million mark.

However, that would reduce the value of already found Bitcoins, which coin owners will probably not accept.

Currently, however, Bitcoin scarcity and rising prices are attracting speculative investors, whose actions have led to value changes that discourage serious investors from cryptocurrency.

The price of Bitcoin this year plummeted from its highest value of $60,000 in February to half that amount over the summer to rebound to $55,000 per coin this week.

Still, some countries like El Salvador and Cuba see potential in the currency and are taking steps to make it a legal tender.