China’s crackdown on cryptocurrency has sparked a boom in Thai crypto mining Business and Economic News

Bangkok, Thailand – At a time when the Chinese currency crashed in massive Chinese mining, Pongsakorn Tongtaveenan was ready to make the leap to a Thai businessman: quickly buy the redundant computer processors needed to recover Bitcoin from the network and send it to Southeast Asia.

“Chinese miners removed the machines and the price fell by 30 percent,” Pongsakorn told Al Jazeera.

Prices have returned to over $ 13,000 for new “miners” – computer hardware that solves complex math puzzles that release Bitcoin rewards from the web.

However, Pongsakorn, 30, has been able to sell hundreds of units across Thailand as small players jump into cryptocurrencies while China shrinks the market it has gained.

In september Beijing banned all cryptocurrency trading and mining Among the concerns were that virtual currencies were “growing illegal and criminal activities” and posed a risk to the “economic and financial order”.

The crackdown forced some of the world’s largest Bitcoin mining operations to seek new bases with friendly regulations and the key component of cheap electricity to run thousands of computers clockwise.

Largest and most relocated operations in the United States – especially Texas – Malaysia, Russia and Kazakhstan, among others.

But for many small-scale miners who wanted to cut and run quickly for fear of provoking the anger of China’s authoritarian government, the priority now was to get their money back on useless computers.

This created an opportunity for entrepreneurs like Pongsakorn, who were willing to beat unwanted gears – especially the Bitmain Antminer SJ19 Pro – from Shenzhen to Thailand.

“Bitcoin is the gold of the digital world. But a mining platform is similar to gold mining stocks: you are paid dividends based on the price of gold,” he said.

Pongsakorn’s equipment has fueled Thailand’s rural mining industry, each of which can earn $ 30-40 from each machine in operation every day.

“There are now about 100,000 miners in Thailand,” he said.

Their pandemic includes people looking for stable incomes in the pandemic, but also investors who believe in the future of digital assets.

“By the time China banned cryptography, we were excited,” a Bitcoin fan told Al Jazeera when he became a miner, running a small solar-powered processor from his garage.

At an initial cost of about one million baht ($ 30,000), he set up an equipment.

“I got everything back in three months,” the miner said, and asked to remain anonymous.

Many large Thai investors are watching up close Laos, which is taking the rise of cryptocurrencies in silence.

A poor and officially communist country with a population of 7.2 million has only 43% access to the Internet, according to a 2020 study by We Are Social and Hootsuite internet and social media analysts.

But its advantage is the abundance of cheap electricity generated by dozens of mega dams.

“More than 95 percent of the electricity produced is for export, so it must be used excessively, otherwise it is a huge waste for the government,” an expert on Laos cryptography told Al Jazeera on condition of anonymity.

“They see a chance to turn that excess into millions of dollars.”

Thai entrepreneurs like Pongsakorn Tongtaveenan are buying crypto-mining platforms after China cracked down on cryptocurrencies. [Courtesy of Pongsakorn Tongtaveenan]

In November, the communist government opened cryptographic mining and trade by offering licenses to six large, well-connected companies in Laos.

The initial terms of the license include a $ 5 million guarantee for any company that plans to trade in cryptography, and mining operations must register to buy about $ 1 million worth of electricity from the Laotian state grid and pay a large operating fee.

“Laos is hampered by a lack of geography and human capital,” said David Tuck, a Bangkok-based venture capital partner at Lyriant Advisory, Al Jazeera.

“He needs money in the government coffers and has little chance of generating revenue.”

Laos’ mega-dams, often financed by debt, produce electricity, including for Thai people who are in dire need of energy from outside.

“The new request from a large home buyer would be very welcome,” Tuck said.

But any Chinese miner who thinks of slipping off the southern border to connect Laos to cheap electricity would still be very close to the close ally of Beijing.

“They would be working in the backyard of China,” Tuck said.

“The enemy of states”

Some observers say he is scared crypto profits will go to a few connected companies. The regulations favor a “very limited group in Laos,” said an expert on Laos cryptography regulations. “It’s not completely open to the public in Laos, to the consumers in Laos.”

In Thailand, one of the most unbalanced societies in Asia, rich people are working on the rules of the larger crypto game, despite supporting the trend of small-scale investors in Chinese mining units.

In November, a unit of Thailand’s oldest bank, Siam Commercial Bank (SCB), paid $ 537 million to buy 51 percent of BitKub’s shares, the largest cryptocurrency exchange in Thailand. King Maha Vajiralongkorn of Thailand owns 23 percent of the SCB.

With regulators finally allowing Thailand to easily trade digital currencies, BitKub aims to absorb the shares of millions of domestic customers with the aim of becoming the largest trading platform in Southeast Asia.

For some cryptocurrency enthusiasts in Thailand, the emergence of BitKub is viewed with suspicion as an attempt to centralize the renegade financial mode of the past.

“The goal of Bitcoin was to become the‘ enemy of the states ’… but the rich have taken it upon themselves,” the miner said on condition of anonymity. “If you can’t fight it, you might jump on board.”