Key Takeaways
- Trump advocates US-based Bitcoin production to increase energy dominance.
- Currently, less than 50% of Bitcoin mining computing power is based in the US, facing competition from countries such as China and Russia.
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Trump has called for all remaining Bitcoin to be mined in the US, but experts believe that practical challenges such as global competition and the decentralized nature of Bitcoin could make this nearly impossible.
In June, Trump met with US-based Bitcoin mining executives at Mar-a-Lago to discuss the industry's potential for job creation and energy dominance. The gathering included representatives from Riot Platforms, MARA Holdings, TeraWulf, CleanSpark, and Core Scientific.
After the meeting, Trump posted on Truth Social:
“Biden's hatred of Bitcoin only helps China, Russia, and the Radical Communist Left.” WE WANT EVERY BITCOIN REMAINING MADE IN THE USA!!! It will help us be ENERGY dominant.”
After making his initial promise, Trump has continued to emphasize his commitment to domestic Bitcoin production. He has said in later promises that if crypto is going to define the future, he wants it to be mined in the US.
Experts, however, are skeptical about the feasibility of Trump's promise.
“It's a Trump-like idea but certainly not in reality,” said Ethan Vera, chief operating officer of Seattle-based Luxor Technology, which provides software and services to miners. told Bloomberg.
Since approximately 95% of the total Bitcoin supply of 21 million has already been mined, there are significant challenges in controlling future production.
Not only that, ongoing global competition makes it difficult for the US to control Bitcoin production, according to Taras Kulyk, CEO of Synteq Digital. US-based miners currently account for less than 50% of the total computing power used in Bitcoin mining.
At the same time, countries such as China, Kazakhstan, and Russia, often benefiting from lower energy costs and less regulatory scrutiny, have been home to major Bitcoin mining operations.
Recently, Russia introduced a legal framework that defines the rights and obligations of the miners. the law, signed by President Vladimir Putinrecognizes mining as a legitimate economic activity and allows registered legal entities and individual entrepreneurs to engage in it.
The decentralized nature of Bitcoin allows miners around the world to participate in transaction verification and coin creation. Countries with cheaper energy sources, including emerging markets in Africa such as Ethiopia, are becoming attractive locations for mining operations.
The President-elect has high prices recommended on Chinese imports, claiming that such measures would protect American businesses and jobs. If he continues with these targets, it would increase costs for American miners who rely on Bitcoin mining equipment coming from China.
As a result, it may be difficult for US miners to compete globally because their operating costs would be higher.
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