The fate of millions of Bitcoin miners in China

November 26, 2021 By admin 0

Millions of Bitcoin miners from China have traveled to other countries including many in the US, Kazakhstan, Russia and Canada, following the mid-year ban.

According to the Financial Times, the 14 largest cryptocurrency miners in the world have moved more than 2 million Bitcoin miners out of China following a crackdown by the Chinese government in May.

In fact, investors have started moving Bitcoin mining machines since March 2020. But by the time the ban was announced, there were still more than 20,000 machines left here. This is just the number of statistics at Bit Digital.

Bit Digital hired an international logistics company to move tens of thousands of Bitcoin miners elsewhere, but there are still a shipment of 1,000 waiting to be shipped to New York and 372 are left behind because they have expired.

The places that benefit the most

In the midst of panic as China cracked down on cryptocurrency mining operations, many companies in this field received offers to buy back Bitcoin miners.

According to mining company Luxor, the ban from China triggered the liquidation of Bitcoin miners at a very cheap price. For instance, the Bitmain Antminer S19, one of the popular models, dropped 41.7% in price in the May-July period.

Bitman, today’s leading mining machine manufacturer, sold 30,000 S19 models to Marathon Digital Holdings – a company based in Las Vegas – in August. Similar machines were also supplied to Terauulf in Maryland. However, the company is currently limiting the number of units sold because of concerns that their prices will continue to fall.

Besides North America, Kazakhstan is also becoming an attractive destination. Financial Times data shows that the majority of miners shipped to the Central Asian country are from Chinese company Bitfufu, with 80,000 machines arriving at farms in Kazakhstan in August.

Russia is the place that attracts the most miners after China’s ban. Source: Financial Times

However, the place that benefits the most is Russia when it attracts 205,000 mining machines from China. In which, BitRiver alone received 200,000 machines, shipped in lots, the rest belonged to Bit Cluster in Moscow.

Jaran Mellerud, an analyst at research firm Arcane Crypto, said that there are currently less than 700,000 miners in China that have not yet been activated. They are likely being stored or discarded as many of them are of an older generation, which would make long-distance transportation less efficient in terms of cost.

Old Bitcoin miner – opportunity for small countries

According to experts, the old machine’s fate will follow two paths: being discarded or scattered to less noticeable mining locations. South America, especially Venezuela or Paraguay, becomes an ideal destination because of low electricity prices.

Juan Jose Pinto, co-founder of Doctor Miner, a Venezuelan mining company, said the Chinese limits are a great opportunity to buy a machine at a good price. So far, there are three major companies in China contacted to provide about 7,000 machines. If we had the resources, we would continue to buy and hoard more, Pinto said.

According to him, Venezuela currently has relatively cheap electricity and Doctor Miner only has to pay $ 0.01 per kWh. This is an opportunity for the old, power-hungry Bitcoin miner to have a chance to be used.

Besides, because old machines often fail, the company tries to make use of working components to assemble new machines. Usable components will be combined with each other in the hope of creating a coin miner.

Digital Assets, a company based in Paraguay, is also set to receive 15,500 miners in the coming months. However, these companies are facing competition from some people who are also starting to buy machines and mine independently.

In the context of the economy going down, cryptocurrencies are a way for people to earn extra income. Getting $100 a month also makes a big difference to them.