Unlike the money that central banks print around the world, Cryptocurrencies go through a process that is colloquially known as mining, as well as the technique that allows to extract metals from the earth.
The difference is that computers are used and their computing power that allow to process mathematical problems. Every time they are solved, you get cryptocurrencies in return. This activity has been transformed along with the crypto ecosystem: it went from being made up of a few doing it in their living room to companies with a multinational presence.
The computing power that is needed to mine cryptocurrencies requires energy, and that which generates bitcoin already represents 0.52% of electricity consumption worldwide. In perspective, if the token were a country, it would have an energy consumption similar to that of Argentina or the Netherlands, according to the accounts carried out by the Cambridge Bitcoin Electricity Consumption Index of the University of Cambridge.
Looking for site
The calculations of the Cambridge Centre for Alternative Finance (Cbeci) indicate that USA It became the new mining paradise after the veto led by the Chinese government, once a promised land for the industry.
Its most recent report, from July this year, estimates that 35.40% of the global hashrate was located in this country. Kazakhstan, a neighbor of China, began to gain relevance, with a participation of 18.10%.
In December 2020, China accumulated 53.30% of the hashrate, and although today it is officially zero, it is believed that there is still hidden mining. The same occurs with Venezuela, where this activity is also believed to be important.
Texas and El Salvador
The crypto migration to Texas It’s been shaping up for months, but the sheer volume of power those miners will need – twice as much as the state capital’s consumption of nearly 1 million people in all of 2020 – is worrisome.
The boom comes just when the power system is under pressure from population growth and a more robust economy. The state network proved to be unreliable in the February catastrophic blackouts, which left millions of people left in the dark for days, killing at least 210 people.
The miners that settle in the state They typically come with a 10-year tax break, sales tax credits, and workforce training from the state, depending on where they are located and the number of jobs they create.
Even without formal incentives, low electricity prices and low cost policy of non-intervention of the state in relation to companies are usually attractive enough.
In the case of El Salvador politics does intervene, but it is in favor. The government of Nayib Bukele installed 300 processors to mine the cryptocurrency at the Berlin Geothermal Power Plant, near the Tecapa volcano.
In October, Bukele tweeted that this energy mined 0.00599179 bitcoin, or about $ 269 at the value on that date. “We are still doing tests and installations, but this is officially the first bitcoin mining from the volcano“, wrote.
At the moment, he is winning the Texas economic liberalism al interventionism from El Salvador but if the experiment of the bitcoinization of President Bukele’s economy triumphs … anything can happen.
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