Canada could be the next crypto mining hub after China’s crackdown

With Chinese crypto firms mining over two-thirds of Bitcoin blocks despite a nationwide ban, the country’s central bank is now looking at casting a complete ban on cryptocurrency mining.

China has noted the high consumption of electricity and environmental concerns as its reasons for prohibiting crypto mining. It is also known that the country has already launched a pilot program for its own central bank digital currency (CBDC).

While China cracks down on crypto mining, there has been some speculations on Canada’s chances of rising to prominence on this front.

Canada is known for its cold climate and abundant subsidized clean energy, which is an apt ecosystem for crypto data centers. In addition to this, Canadian regulators have been comparatively liberal regarding blockchain technology companies, which are also running their crypto mining centers.

There are more than eight Canadian exchanges-listed firms that hold cryptocurrencies in their inventories. Most of them also participated in the first Bitcoin Mining Council and pledged to use green energy sources like solar, wind, and biogas to operate crypto mining centers.

A push for green bitcoin mining – What are the companies doing?

Vancouver’s DMG Blockchain Solutions Inc. (TSXV:DMGI) recently joined hands with UK-based cryptocurrency mining firm Argo Blockchain Plc via the Crypto Climate Accord (CCA) to accelerate decarbonization in the crypto mining space. Both firms also agreed to bolster more transparency in their operations by providing “proof of process”.

Bitfarms Ltd (TSXV:BITF), an emerging Canadian crypto mining firm that recently debuted on the Nasdaq, mines nearly one per cent blocks of the total Bitcoin supply on a daily basis using environment-friendly resources. In late May, the company reported that it held around 1,006 BTC worth almost US$ 39 million.

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In April this year, Vancouver-based crypto miners Link Global Technologies Inc. (CSE:LNK) and Neptune Digital Assets Corp. (TSXV:NDA) also unveiled their clean energy joint venture, Pure Digital Power Corp. This corporation will seek to supply an eco-friendly generated electricity to run their crypto mining centers.

Canadian crypto firms to double mining capacity in 2021

Canadian blockchain technology firms have reportedly been importing and acquiring graphics processing units (GPUs) and application-specific integrated circuits (ASICs) to double their hashrate.

Hut8 Mining Corp. (TSX:HUT) has joined forces with US-based blockchain tech firm Luxor Technology Corporation to bolster its Bitcoin (BTC) and Ethereum (ETH) mining capacity.

In March, CryptoStar (TSXV:CSTR) disclosed that it has signed a definitive contract with a Hong Kong-based crypto mining equipment dealer to import GPUs and ASICs. The crypto miner expects to extract Bitcoin blocks at a higher hashrate.

Taking advantage of the present resources, existing blockchain technology companies have already started boosting their operations. On the back of the rising adoption of digital currencies and a viable mining ecosystem, Canada could become a leader in crypto operations in the future.

Please note: The above constitutes a preliminary view and any interest in stocks and cryptocurrencies should be evaluated further from an investment point of view.