Cryptocurrency mining is an activity consisting of solving complex mathematical puzzles. Thanks to these, new cryptocurrencies are generated, which result in that transactions can continue to be made. Cryptocurrency mining is a legal activity in some countries, such as China. The Asian giant produces 70 percent of the world’s bitcoins.
There are thousands of mining farms that populate the country, mainly near power plants and in those areas where energy is subsidized by the government. Energy is very cheap in China, so mining is a profitable process. But the Chinese government is putting up obstacles of all kinds, which is causing the miners to flee to other places . One of those who is opening its arms to the Chinese miners is Mongolia, which is welcoming the miners with open arms.
Why they ban mining in some countries
The most striking case is Iran, a nation that has just over 80 million inhabitants. The Islamic country has been characterized as a good place for mining cryptocurrencies. Energy is quite cheap in there. This happens because in Iran it is the state that subsidizes energy. But the infrastructures are not up to the task. In addition, the country has a severe climate in some areas. Summer is very hot in some regions, which puts a strain on the electrical grid to power the air conditioners. High mountain areas have, on the contrary, cold temperatures in winter. The demand for electricity from mining is very high, and as a result, entire towns have suffered prolonged power outages. For that reason, the government has banned cryptocurrency mining until September 22. It should be noted that 85% of the mining activity carried out in that country is illegal.
The global situation
Countries like India have also come out against promoting the mining infrastructure , since the objective of this country is to create its own cryptocurrency. Ecuador or Bolivia are not very friendly with cryptocurrencies either, since, in the case of Ecuador, there is a digital money system. Bolivia is stricter and strongly prohibits crypto.
Morocco directly believes that cryptocurrencies can be used for money laundering purposes and to finance terrorist campaigns. Algeria and Egypt, in addition to Tunisia, do not contemplate that cryptocurrencies are part of the financial system of their states. Therefore, it seems that cryptocurrencies have an increasingly complex landscape in terms of mining, due to government obstacles.
On the contrary, the cases of Canada, Georgia, Iceland or Venezuela, the latter with the cheapest electricity rate in America, are receptive when it comes to favoring mining. Setting up regulated farms, and driving clandestine miners out of their work, is increasingly seen as a viable and sensible option. If the planet needs crypto, someone will have to generate it and continue to fuel the craze that started in 2008 with Bitcoin.
