Bitcoin mining, a key part of the cryptocurrency world, is undergoing major changes as only 1.19 million Bitcoins remain to be mined out of a total supply of 21 million, worth approximately $74 billion. This growing scarcity is raising geopolitical tensions, with Donald Trump pushing for more Bitcoin mining in the US amid concerns that Chinese-made equipment could be used for espionage.
Bitmain's Dominance Under Pressure
Bitmain Technologies Ltd., a Chinese company, has controlled about 90% of the Bitcoin mining computer market for years. This dominance is so significant that it can affect global Bitcoin prices by simply adjusting production. However, the dominance of this Chinese company is threatened by political shifts, especially the possibility of Donald Trump returning to the White House.
At the 2024 Bitcoin Conference, former President Donald Trump called for Bitcoin mining to be “mined, minted, and created” in the U.S. His comments reflect a growing push to remove Bitcoin mining from Chinese control.
Concerns over Chinese equipment prompt US action
Following China’s ban on Bitcoin mining, more mining operations have moved to the US. This shift has raised concerns about the use of Chinese-made mining equipment. US officials worry that this equipment could be used for surveillance and espionage.
In May, President Biden ordered the Chinese company MineOne to sell its Wyoming property. The move was made over concerns that the equipment could be used for espionage. The move is part of a larger effort to limit China’s role in key technologies.
While there is no public evidence of espionage, these concerns have led to stricter regulations and increased scrutiny of mining operations using foreign hardware.
The Challenges for Bitmain
Despite its past dominance, Bitmain is facing increasing challenges. The company has moved some of its production to Southeast Asia to avoid the impact of U.S. tariffs. However, these efforts may not be enough to protect its position as competitors begin to gain a stronger hold.
American companies step up
As political tensions rise, US companies are stepping up to challenge Bitmain’s dominance. For example, Auradine, a startup based in California, recently entered the market with new mining machines. Auradine, which raised $80 million earlier this year, is now attracting the attention of major investors.
Texas-based Core Scientific Inc. has also placed large orders for mining equipment, despite the fact that Bitmain is one of its largest investors.
The Future of Bitcoin Mining in the US
As the US moves to gain more control over Bitcoin mining, the sector is likely to undergo major changes.
While Bitmain's rigs are still considered the best in terms of efficiency and power, US companies will have to innovate and produce competitive alternatives to meet the growing demand for American-made mining hardware.
Also read: What is Hyperbitcoinization? How Can It Take Bitcoin to $10 Million?
The battle for Bitcoin dominance has only just begun.
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