On July 1, amid a soaring price gain by Bitcoin, the mining hash rate surpassed 69 quintillion hashes per second. The Bitcoin mining space has marched on over the last two years through a harsh regulatory environment that’s proven difficult for the cryptocurrency industry as a whole.
China has had an interesting rhetoric surrounding cryptocurrencies over the last few years. The government has drawn a line on trading by banning Bitcoin trading, initial coin offerings and crypto exchanges.
Despite the bans on the trading side, China’s Bitcoin mining scene is the biggest in the world, with Chinese mining pools reportedly mining potentially 70% of all the coins created yearly. The reason for this dominance is largely due to the massive surplus of electricity in the country. This is evident in the Sichuan province, which is considered the Bitcoin mining capital of China. This surplus of electricity has led power producers to encourage companies to set up operations and exploit the untapped energy supplies.
The dominance of China in Bitcoin mining could be disrupted if the regulations that were suggested in April of 2019 come to fruition, with a government agency lobbying to ban crypto mining outright in the country. Reports in 2018 also suggested that many mining operators were looking overseas amid growing pressure from the Chinese government.
Russia has a more relaxed approach to Bitcoin and cryptocurrencies, but still do not have a definitive regulatory stance on the space. Bitcoin is not regulated, but its use as a payment option for goods and services is illegal.
Cryptocurrency mining has continued in the country, with the cold climate and cheap electricity as contributing factors. However, a report in June suggests that cryptocurrency mining operators could face fines in the future.
Anatoly Aksakov, the chairman of the State Duma Committee on Financial Markets, told local media outlet TASS that the cryptocurrencies created on open blockchains were considered illegitimate. At the same time, Aksakov stressed that it is not illegal to hold Bitcoin in Russia if the cryptocurrency has been bought or acquired outside of the country.
Iran’s government has taken a stern stance toward the crypto mining industry in the country due to a massive increase in electricity usage. The Iranian energy ministry believes that mining operations are to blame for an irregular 7% spike in electricity consumption amid fears of its grid taking undue strain and intends to cut power to mining operators until it has approved new energy tariffs.
Given the increase in mining activity and the profitability in Iran, the country’s deputy energy minister, Homayoun Haeri, suggested that the billing of mining operations should be the same as charges for power exports in June 2019. The mining scene in Iran will have to endure a few months of uncertainty until the new electricity tariffs are approved by the Iranian government. It is a blow for a country that is looking to cryptocurrencies as a means to bypass harsh economic sanctions that have hampered its ability to trade with the global community.
Canada positioned itself as a crypto-friendly country that is openly providing opportunities for mining operations. The country classified Bitcoin as a commodity, which makes users liable to pay tax, depending on how they acquire and use the crypto. If Bitcoin is received as income, it is taxed as such, and if they hold it as an investment, they pay capital gains taxes.
Cryptocurrency mining is also taxed, depending on whether the operation is run as a business or a hobby. The latter is considered a nontaxable event. While the trade and use of cryptocurrencies are welcome but controlled in the country, the mining scene has been nurtured to a far greater extent.
In June 2018, Hydro-Québec introduced rules that required cr