Marathon Digital labels mined Bitcoin blocks with "Made In USA"

After the US Bitcoin mining company Marathon Digital Holdings announced yesterday that it would issue convertible bonds worth 250 million US dollars in order to use the money to purchase more Bitcoin, the public limited company declared on the social media platform 𝕏 that all Bitcoin blocks mined by the company in the USA would henceforth be labeled "Made In USA".

This patriotic move appears to be a reaction to Donald Trump's wish that "all remaining Bitcoin should be produced in the US" in order to strengthen the US's status as a dominant energy source. The presidential candidate announced this on his social media platform Truth Social during the election campaign. Support for the US mining industry was also a topic during Trump's campaign speech at the Bitcoin 2024 conference in Nashville. According to the speech, Trump wants to turn the USA into a "Bitcoin mining powerhouse" in order to mine more Bitcoin in the USA, among other things.

With the "Made In USA" label, Marathon Digital is expressing its support for Trump's election promise in order to emphasize the desired dominance of the USA in the Bitcoin network.

However, the Bitcoin network is not actually dominated by the MARA pool. Chinese mining pools are currently responsible for the majority of the Bitcoin hashrate and accordingly find more blocks than Marathon Digital. However, this does not mean that most Bitcoin is mined in China. Following the restriction of mining activities in China in 2021, many Chinese companies have repositioned themselves abroad. However, the connection with a Chinese mining pool remained. In addition, many pools are also open to the public, meaning that anyone interested from anywhere in the world can join.

The MARA pool is not open to everyone. Marathon Digital specifically selects certain companies that share its values and goals, such as the US mining company DGM Blockchain Solutions.

The largest facilities are located in McCamey in Texas and Ellendale in North Dakota. However, Marathon Digital also operates a facility in Hernandarias (Paraguay) with 2,600 mining devices and a capacity of 0.8 EH/s together with Penguin Infrastrucuture, as well as a facility in Abu Dhabi (UAE) with 8,500 ASICs and a capacity of 1.3 EH/s together with Zero Two. There are also already plans for a plant in Kenya. It is not yet clear whether the blocks from the plants abroad will also receive a special national label from Marathon Digital.

The purpose of the "Made In USA" label is probably to express support for Trump and his Bitcoin-specific and patriotic election promises. However, such a label has little meaning for the Bitcoin network itself. Bitcoin is borderless, neutral, fungible and universally accessible. The strength of Satoshi Nakamoto's creation lies in its decentralized nature, on which user trust is ultimately based. Mining is also distributed across the globe.

It remains to be seen whether miners from other nations will follow suit and also mine "national Bitcoin blocks". Within the network, a Satoshi remains a Satoshi, but it cannot be completely ruled out that national blocks will gain in importance and be treated differently in certain jurisdictions - for example with regard to taxes or outright bans on interacting with units mined in a hostile nation.

The national labeling of Bitcoin blocks also creates a new form of Satoshi unit and could therefore affect fungibility - to the extent that people attach meaning to such a label. In addition to "Uncommon", "Rare" or "Epic Sats", "National Sats" could now also become an issue. If patriotic sentiments are placed above the fundamental concept of Bitcoin, this could lead to a split in the community.

Bitcoin remains independent in its function as a store of value and means of payment - even if states want to make the asset their own. Nevertheless, it could become a problem if users as a whole attach more value to certain units than others. However, this cannot be assumed due to economic incentives - even if states create corresponding incentives. A "US bitcoin" will probably continue to be worth and recognized just as much as all other units in the future.