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China has caused a Bitcoin Mining Exodus

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Alex Brammer, vice Luxor Tech, president of the U.S. cryptocurrency company’s business development department, said he was bombarded by calls from Chinese miners at the time of the May 21 speech. “We were making calls to very large miners trying to find colocation space all over North America,” he says. “We were making calls and the following questions were being asked: ‘Can you put 20,000 machines in 14 days?’ for example, the tone of the industry was very frantic. ”

“Anecdotally, I would say a lot and a lot [miners] It will leave China in the next 30 or 60 or 90 days, ”Brammer added.

Non-Chinese entrepreneurs could be the first to stick around, according to Van Kirk of Kaboomracks. “We have customers staying in China, but they are westerners, who want to find capacity outside of China,” he says. “They’re looking for something in the United States or Canada.”

North America should not only be sought as a future destination. Parts of northern Europe and Latin America are also being considered; in general, Brammer says some Chinese want to move the business to a place that is “politically stable, has strong property rights, already, and has a stable regulatory framework of some sort.” But the US, which is already the second country in the world for bitcoin mining, could be said to be particularly attractive.

This does not mean that the movement will be easy. Logistically, Brammer says it is a nightmare to transport tens of thousands of machines from China to the United States, mainly due to the global pandemic. shortage of vessels, and a covert trade war that will have to pay any company that wants to move goods from China to the US 25 percent rate. Even after mining machines are unloaded from private cargo planes or container vessels, the implementation of a new mining operation in North America will take time. “Some of these [Chinese miners] they will come and say, ‘we would like to buy 500 megawatts of content’, and you have these North American energy generation facilities and mining facilities that say ‘we just have that’, ”says Brammer. Time to build a large mining facility from scratch It is estimated to be around 12 to 24 months.

Edward Evenson, the director of business development for the bitcoin mining company Braiins, is much better. He says the biggest miners will send new machines from manufacturers outside of China and will have the resources to get that out pretty quickly. “Small miners may not have the resources or connections, so they’ll probably have to sell the machines,” Evenson says. “But larger operations will move the machines to more stable mining environments.”

The big question, however, is whether the dreaded calls will lead to a real exodus. The truth is that right now most Chinese miners are waiting for the next move by the government. “Chinese miners, who have a higher risk tolerance than Western miners in our observation, are largely waiting,” says Ian Wittkopp, vice president of venture capital firm Sino Global Capital in Beijing. “Most Chinese miners have experienced similar news cycles in the past. The cost of migrating to a new location can be high, hopefully most miners will be waiting for more regulatory clarification before relocating. ”

It’s not the first time China has punched bitcoin; but this bleak attitude has never sunk the country’s thriving bitcoin industry. “Every time the price of Bitcoin rises, and there is a lot of speculative mania around it, the government makes one of those announcements,” Evenson says. “Basically, they’ve been doing it every year or every year since 2013.”

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