China has been the undisputed leader in the global bitcoin mining market, but as the technology and business models evolve, the hash power is poised to shift to the US, the CEO of Layer1 mining startup told Max Keiser.
Around 60 percent of the hash rate is currently generated in China, as the mining industry has always been about sourcing and installing the most efficient mining hardware faster than anybody else, according to Alexander Liegl of Layer1. However, the production of new generation chips could now require a multiyear effort, making other factors like cost and efficiency more important.
“What truly matters is your operational expenses and those are primarily a function of your electricity pricing. Hence, it’s your electricity pricing and the ability to take advantage of it efficiently due to your cooling is what matters the most,” Liegl said in an interview to RT’s Keiser Report.
That’s why the company, which has recently been backed by billionaire investors including Peter Thiel, says that west Texas is where the bitcoin industry may flourish, as this is where it can get cheap power. Liegl explained that Texas enjoys attractive market prices as it is the most deregulated energy market in the US, and has the biggest wind energy market, a huge solar power industry, and modern infrastructure.
“We believe that the cheapest electricity in the world that scale is west Texas,” the CEO of Layer1 said, adding that the hash rate will “significantly shift” towards being US-based.
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