Bitcoin mining is one of the most lucrative industries within the crypto sector, and has been for some time. Though the expenses for mining Bitcoin have certainly increased in the wake of the most recent halving, which saw the block reward reduced to 3.125 BTC, that hasn’t prevented mining companies from being profitable.
But where are the majority of mining operations happening nowadays and why? Let’s jump in.
Source: Chainbulletin
Bitcoin Mining Hashrate by Country
In the map shown above, you can see a heat map of where most Bitcoin mining operations are around the world. The more red a country, the higher the hashrate that country is producing.
The US leads with a hashrate that’s over 37% of the global total. China is in second with 21%, and Kazakhstan is in third with 13%. Canada has a little over 6% and Russia, despite only recently legalizing Bitcoin mining again, is at 4%.
It’s perhaps no surprise that the US has the highest hashrate of any country around the globe, as Marathon Digital Holdings (NASDAQ: MARA), Foundry USA Pool, Antpool, F2Pool, and ViaBTC, are all US-based mining operations. Those are 5 of the top 6 hashrate producing pools currently.
Now, it’s worth pointing out that this chart doesn’t really show the publicly-traded US mining companies other than Marathon. Riot Platforms (RIOT) shows on their site that they have 23.0 EH/s as of July, which would put them below Marathon’s 31.8 which is stated on their site. Similarly, Core Scientific (CORZ) had a hashrate of over 20 EH/s on their May 2024 production report.
US Miners Have Unique Opportunity
What the above hashrate for these publicly traded companies demonstrate, is a unique opportunity which many other mining pools don’t have access to, and that’s many funding options. These publicly traded companies have a much easier time expanding their operations because they can access all sorts of capital and debt in the US that private companies cannot. This gives them the opportunity to expand and take market share from some of these incumbent pools which have been around for years.
This was proven when, on August 12th, Marathon announced a $250 million convertible note offering to raise funds for Bitcoin purchases. High demand then allowed them to accept $300 million. Marathon then used $249 million from the funds to buy 4,144 Bitcoins at an average price of $59,500 per.
Similarly, Riot Platforms announced a $750 million equity offering and Core Scientific announced that they planned to issue convertible debt.
With all the opportunity to take advantage of capital in the US, it seems likely it will remain the top location for Bitcoin miners to stay unless something drastic happens elsewhere.
Mining Pools vs Cloud Mining
It’s worth noting the difference between mining pools and cloud mining. All of the major mining companies around the world are providing mining pools, which require you to have your own hardware to contribute to the pool. This means you need to buy a Bitcoin miner, have it set up, have your power source figured out, and so on. The hashrate which your hardware generates will then determine your share of BTC when the pool is successful in solving a block.
Cloud mining is something you do when you don’t own any hardware to contribute to the pool. Instead, you’re paying the cloud mining service for all the expenses related to using a Bitcoin miner. They own the miner and set everything up including the power sources and the actual mining pool to join. You then get rewards without having to run the miner yourself.
Cloud mining is often offered by the major mining companies, as they can offset some of their expenses by having users pay for them instead. Antpool is perhaps the biggest name in mining companies that offers cloud mining to users (Antpool is the second largest miner by hashrate).
Closing Thoughts
Despite the noise made about the environmental impact of Bitcoin mining, the industry remains strong, with the US leading the way in hashrate. Mining difficulty is only likely to increase as both private and public companies look to add to their hashrate, and Russia now starting to enter the game. This is all good for the crypto sector though, as it further legitimizes Bitcoin as an asset if nothing else.
Though it’s hard to say just how far Bitcoin can go as a store of value, there are certainly a lot of companies putting their money where their mouth is.
