Where is cryptocurrency mining taking place today? Well it’s taking place all over the world but there are certain countries where you know the four key ingredients – low cost electricity cold-weather, reliable internet and low population density – are more present than others. So you see a lot of cryptocurrency mining taking place in the far north in the northern hemisphere so countries like Iceland, Sweden, Canada. You also see cryptocurrency mining taking place in countries like the United States but by far and away the country where most of this mining is taking place is China for a couple of reasons. One – and the biggest reason of all – is low cost electricity or free electricity.
China has very cheap coal-based electricity and also a lot of excess hydro capacity. So a number of hydro-facilities and provinces like Sichuan were developed in the anticipation of new cities coming online to take advantage of this very inexpensive electricity. However, that electricity is idle, it’s not being utilized and so many hydro dam operators have gone into the cryptocurrency mining business. I think this is important to keep in mind as we think about the environmental impact of bitcoin. If that electricity is just going to waste it’s already really less of a negative externality for bitcoin to be having you know this excess hydro-capacity used for bitcoin mining.