The United States leads, for now, the world ranking of hashrate.
El Salvador, Argentina and Paraguay are ready to welcome new miners.
The Bitcoin miner relocation that began this year will continue into 2022 and thus the hash rate will be even more geographically distributed as the industry establishes operations in new locations. So, looking towards the next year, the projections of the analytical company Arcane Research present Latin America as one of the most promising regions to generate mining power.
Before China’s total ban on Bitcoin mining, the country generated roughly 70% of Bitcoin’s hash rate. However, in October the United States displaced the Asian country, concentrating 35.4% of the mining power, after the massive migration of miners from the Asian giant. Faced with this new panorama, relocation of miners will continue next year and many will settle in Latin America, Arcane points out in his most recent report.
Additionally, analysts note that the rapid move by many mining companies showed that while it is a physical industry, bitcoin mining is highly mobile and adapts to change quickly. But the geographical distribution of miners will not stop because “Bitcoin’s energy consumption will continue to be a hot topic in 2022 and some jurisdictions will ban the activity, while others, energy-rich, will embrace the industry,” the report adds.
Coinciding with Arcane, in a recently published report, CriptoNoticias notes that in 2021 Bitcoin miners became nomads and that the search for a new home continues. In such a way that many miners could move to El Salvador where there is already a “plan to offer facilities to mine Bitcoin with very cheap energy, 100% clean, 100% renewable and with zero emissions, taking advantage of volcanic activity”, as noted by the Salvadoran President Nayib Bukele in the middle of the year.
Argentina too stands out as a Latin country with potential for Bitcoin mining. In fact, the Canadian company Bitfarms Ltd. is advancing its plans to build a gigantic Bitcoin mining center in this country, a project in which it has been working since October last year.
Is also Paraguay, whose government has an interest in exploiting the mining business in its territory. In addition, because of the vast sources of hydroelectric energy – which is renewable and cheap – that the nation has, many now consider it “a paradise” for Bitcoin mining.
Bitcoin the best protection against inflation
On the other hand, the Arcane Research report points to the 2021 as a year of rising inflation in the United States, reaching its maximum level in the penultimate month of the year. As reported by CriptoNoticias at the time, the country’s consumer price index (CPI), corresponding to the month of November, showed an increase of 0.8% and brought the inflation rate to 6.8%, its maximum in almost 40 years.
The Chairman of the United States Federal Reserve, Jerome Powell, not only recognized that inflation will hit the population indefinitely, but also admitted that the Central Bank has created dollars from scratch at an unprecedented rate. The measure responds to the many tools used by the government to rescue the economy amid the coronavirus pandemic.
The Fed has also said that the rate of price increase will fall below 3% by the end of 2022, but some economists believe that inflation will not recede as quickly. In that sense, bitcoin adoption is likely to increase, as the crypto asset is considered a safe haven asset. This is because its value increases over time and, therefore, it is increasingly attractive and profitable for miners.