The great mining exodus: China is exiling more than half the world’s miners

    A month ago, Beijing began a fierce crackdown on the crypto mining and trading industry in China, caused so-called “the great mining migration.” Who will gain an advantage of this great crypto exodus? Experts believe that would be the places with abundant solar and wind energy, free market, and crypto-friendly policy.

    For a long time, there more than half the world’s Bitcoin miners were hosted in China. But now, they want to leave the country as soon as possible. In May China officials began strong persecution on crypto mining and trading that caused the process called “the great mining migration” in crypto circles.

    The start of this exodus is underway, which could be a great opportunity for other crypto-friendly places around the world.

    Mining is the energy-intensive process that both creates new coins and maintains a log of all transactions of existing digital tokens.

    Ideal conditions for a crypto miner are cheap energy sources with a growing share of renewables, a deregulated power grid that lets customers choose between power providers, and crucially a government’s crypto-friendly policy.

    “You are going to see a dramatic shift over the next few months,” a former security engineer at the Gemini crypto exchange Brandon Arvanaghi said. “We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible.”

    Nic Carter, a Castle Island Ventures founding partner, said that China’s next steps are unclear, but a phased rollout is probable. “It seems like we’re going from policy statement to actual implementation in relatively short order,” he added.

    Carter supposes that 50% to 60% of Bitcoin’s entire mining power likely to leave China.

    While China’s intentions haven’t been fixed in law, that doesn’t keep miners from cutting their risks and transferring the business out.

    “We do not want to face every single year, some sort of new ban coming in China,” said Alejandro De La Torre, vice president of mining pool Poolin. “So we’re trying to diversify our global mining hashrate, and that’s why we are moving to the United States and to Canada.”

    Bitcoin’s greatest advantage is that it is not linked to any location. Mining only requires a network connection, but other industries must situate as much closer to their end-users as possible.

    Steve Barbour of Upstream Data, a manufacturer of portable mining solutions for oil and gas facilities, noted: “The cool thing about bitcoin that is underappreciated by a lot of the naysayers is that it’s a portable market; you can bring it right to the source of energy.”

    Where miners are going

    Being a high-competitive, crypto mining is a low-margin industry, where low energy costs are critical, which is why it tends to migrate towards the cheapest sources of power in the world.

    “Every Western mining host I know has had their phones ringing off the hook,” said Carter. “Chinese miners or miners that were domiciled in China are looking to Central Asia, Eastern Europe, the U.S., and Northern Europe.”

    One of the likely destinations is China’s neighbor, Kazakhstan, where the country’s coal mines provide plenty of cheap energy. Kazakhstan also has a more smooth policy about building, which is well for miners who need speedily construct their physical facilities.

    Didar Bekbauov, the lead of Xive, a hosting provider to foreign miners, also sells the specialized hardware for mining. He says about countless Chinese miners who have called him to ask about their rigs relocation, ranging from 15  to thousands. Whether Kazakhstan is the final destination or just a temporary stop will be seen in the next months.

    Who will win the next six months

    There aren’t that many places worldwide that ready to welcome Chinese miner exiles. But this exodus won’t be momentary, while Miners will require some time to move their machines, liquidate their assets, and set up new ones somewhere else.

    Who will gain an advantage of this great crypto exodus? Сompelled пeographic dispersion may equalize the global balance of power and reduce the probability of any single nation controlling the crypto sector. We may also see as many countries will provide special crypto-economic zones in the next six months. That means as well that all the remaining miners will be more profitable for that time.

    “You will see jurisdictions adopting a very favorable stance and creating the equivalent of special zones to encourage miners to host locally,” predicted Carter. “We’re seeing it at the state level here. You’re also going to see it at the country level, you might even see subsidized electricity for mining.”

    Source: https://www.cnbc.com/2021/06/15/chinas-bitcoin-miner-exodus-.html

    • Eleanore says:

      Hi there colleagues, its impressive piece of writing on the topic of tutoringand completely defined, keep it
      up all the time.

    Leave a Reply

    Your email address will not be published. Required fields are marked *