The Great Bitcoin Migration: How China Kicked Out the Industry, and America Became the New Crypto Capital

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China banned crypto mining and transactions in May 2021 due to concerns about cryptocurrency use in illegal activities, such as money laundering, according to Zongyuan Zoe Liu, a senior fellow at the Council on Foreign Relations. This ban had a significant impact on the cryptocurrency industry.

Following the ban, mining companies quickly left China, with many relocating to Kazakhstan, which had an abundance of coal power. Minting bitcoins requires solving increasingly complex math problems, and the hundreds of specialized machines used in the process, along with the equipment to cool them, consume a vast amount of electricity. According to the Cambridge Bitcoin Electricity Consumption Index, Kazakhstan's contribution to the global "hashrate" — the computational power required to make new bitcoins — increased from 7% in May 2021 to almost 20% three months later.

This influx of crypto miners resulted in them using up 7% of the country's generated energy, leading to a surge in fuel prices and widespread power outages. Following a massive public outcry at the end of 2021, mining companies in Kazakhstan were essentially cut off from the grid.

After being pushed out of Kazakhstan, these companies arrived in the United States. Currently, America accounts for about 40% of the global hashrate — up from 17% during China's 2021 peak — making it the largest hub for bitcoin mining. The country's 52 cryptocurrency-mining operations use about 2% of America's energy — enough to power the entire state of Utah or West Virginia. While it hasn't caused the same level of crisis as in Kazakhstan, the massive energy consumption has still prompted pushback from locals and raised concerns about Chinese-owned operations moving in. This is just the latest example of China pushing out burdensome industries, which then end up on America's doorstep.

Bit Mining, one of the major Chinese-owned crypto-mining companies, relocated to the United States. In May 2021, the company had the largest data center and crypto-mining facility in the world, located in China. By September, following a brief stint in Kazakhstan, it was setting up shop in Akron, Ohio, in a building once owned by the tire giant Goodyear.

Other bitcoin-mining companies settled in rural regions in the US with affordable electricity, favorable regulations, and ample warehouse space. However, these noisy facilities, which typically employ only a few dozen people, haven't formed the rosiest relations with neighbors.

"The amount of energy these companies use is staggering," said Jeremy Fisher, a senior strategy advisor with the Sierra Club's Environmental Law Program. For instance, a Riot Platforms mining facility in Rockdale, Texas, uses 450 megawatts of energy — the equivalent of what's needed to power roughly 300,000 homes.

Electricity is also becoming an increasingly pressing issue in the climate crisis. Power outages nationwide have increased 64% since the early 2000s, and weather-related outages have increased 78%.

"At a moment when we need to be rapidly increasing the amount of renewable generation and shutting down fossil-fuel plants, proof-of-work cryptocurrency is pushing the wrong direction," said Fisher.

Resistance to bitcoin mining has manifested largely at the local level. Frustrated locals in Murphy, North Carolina, Massillon, Ohio, and other places are signing petitions, forming coalitions, and creating YouTube channels to fight back against the mines in their towns.

Gladys Anderson, who lives next to a mining facility in Bono, Arkansas, spoke about her experience at a town-council meeting for a proposed facility in Vilonia, Arkansas, last summer. "It's caused a lot of headaches," she said. Her son, who has autism, struggles to deal with the loud noise. "My son is currently in the backyard having a meltdown," she said.

The Bit Mining facility in Akron has also faced pushback. "They're going to be using a lot of water, and electricity rates tend to go up for that sort of thing," said Kelley Sayre, a resident there. A New York Times analysis found that the energy used by the Akron facility translated to 705,000 tons of CO2 emissions a year (roughly equal to the annual amount of emissions from two gas-fired power plants). Bit Mining didn't respond to a request for comment.

The mayor's office of Akron isn't excited about the mine, either. "The bitcoin mining industry as a whole runs counter to this administration's values and policy goals," Stephanie Marsh, the director of communications for the city of Akron, said in a statement. "Digital mining operations consume an exorbitant amount of electricity, employ very few individuals, and take up a considerable amount of space." Marsh told me the city would prefer the space to be occupied by a company that could provide hundreds of jobs and contribute to the local