In May, China called for a severe crackdown on bitcoin mining and trading, setting off what’s being dubbed in crypto circles as “the great mining migration.” This exodus is underway now, and it could be a game changer for Texas.
Castle Island Ventures founding partner Nic Carter says that while it’s not totally clear how China will handle next steps, it a phased rollout is likely. “It seems like we’re going from policy statement to actual implementation in relatively short order,” he said.
Although China’s announcement hasn’t been cemented in policy, that isn’t stopping miners like Alejandro“We do not want to face every single year, some sort of new ban coming in China,” said De La Torre, vice president of Hong Kong-headquartered 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.”
That said, the exodus won’t be instantaneous, in part, because it will take miners some time to either move their machines out of China or liquidate their assets and set up shop elsewhere.Because miners at scale compete in a low-margin industry, where their only variable cost is typically energy, they are incentivized to migrate to the world’s cheapest sources of power.
Didar Bekbauov runs Xive, a company that provides hosting services to international miners. Xive also sells the specialized equipment needed for mining. “But most of the electricity is generated by government power plants, so miners will have to move. That makes them uncertain and desperate to find other locations,” he said.
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