Chinese miners contemplate to move abroad

Chinese miners are preparing for the possibility of having to move their businesses overseas due to threat of China's ban on mining
21 November 2017   1666

Recently, flow of news have been suggesting that China has intention to prohibit mining as state-run Sichuan Electric Power Corporation supposedly spreaded a circular ordering grid-connected hydropower stations to cease supplying low-cost electricity to bitcoin mining operations.

Soon after, it appeared that the report has been contradicted as the company admitted it made several mistakes, including using unverified claims, on its circular.

However, bitcoin miners are still suggesting moving their operations abroad to protect their businesses.

Many of us have already paid visit to Vietnam, Laos, Thailand, Russia and the US, negotiating electricity prices with local authorities and buying sites for future use … The business blueprint is bound to go overseas, even if there’s only a 1 per cent possibility that China’s crackdown against bitcoin would extend to mining.

 

Cui

Cryptocurrency miner from China said in an interview with the The South China Morning Post

The Chinese Bitcoin miners began arriving  to Quebec due to inexpensive electricity and cooling there, looking for alternative locations to place their operations. Hydro-Quebec provides 4.55 $ per kWh. It also plans to provide additional 500 kWh per 2.58 $ by April 2018.

Despite the fact that China has become the leader in bitcoin mining a little uncertainty is enough to induce cryptocurrency supporters to take precautions and even prepare for the possibility of moving operations outside the country.

Bear Market to Hit Mining Hard

BitMEX research division presented an analysis of the impact of market decline on the mining industry
11 December 2018   119

The cryptocurrency market has experienced a marked decline over the past weeks. The BitMEX research division presented an analysis of the impact of these events on the mining industry. Bitcoin hash rate has fallen by 31% since the beginning of November, which is equivalent to the capacity of 1.3 million Bitmain S9 devices. From this, BitMEX concludes that miners as a class are in a difficult situation, however, they may have different conditions, and those who pay more for electricity, are forced to turn off their equipment first, while others may still be quite viable.

The decrease in the price of Bitcoin by 45% since the beginning of November has already caused two recalculations of the complexity of mining to the lower side - by 7.4% and 15.1% on November 16 and December 3, respectively. The first recalculation turned out to be the largest since January 2013, the second - since October 2011.

Bitcoin mining revenue fell from $ 13 million per day in early November to $ 6 million per day in early December. The fall in the size of the miner's encouragement turned out to be even more rapid than the fall in the price of cryptocurrency. This is due to the delay in recalculating the complexity of mining. For the six-day period ending December 3, 21.8% fewer blocks were mined than expected, since the miners left the network before recalculating the difficulty. As a result, in addition to reducing the size of the miners' encouragement in dollar terms, due to lower asset prices, they received 21.8% less bitcoin awards.

One of the popular reasons for the recent decline in the cryptocurrency market is that miners sold bitcoins to cover their costs of hash warsin the Bitcoin Cash network. The monitoring platform Boltzmann recorded an unusually large sale of Bitcoin by the miner on November 12, that is, 3 days before the hard fork of Bitcoin Cash.

BitMEX assumes that the actions of miners over the past weeks could have played a significant role in reducing the market, however, recommends not overestimating their value and reminds that in a bearish trend, prices continue to fall regardless of asset movements and news.