In a recent turn of events, Chinese miners are looking at exploring other options abroad amidst the fear of China’s crackdown on digital currency, and their numbers are steadily increasing.
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Chinese Miners are considering Vietnam, Laos, Thailand, Russia, and the United States as possible places to go in case of crackdown
A document that circulated last week states that China’s biggest electric monopoly State Grid is planning to ban bitcoin mining. Despite the company trying to reduce the power of the document by saying that it was issued at a county branch and not on a statewide level, and that it constitutes an internal memo that merely identifies the inappropriate allocation of hydropower that goes scarce during the dry season of Sichuan, many farmers are still unconvinced, and are already trying their luck with international options in order to escape the uncertainty of the situation.
“We are a state-owned enterprise, not an administrative branch that has the power to determine whether bitcoin mining is legitimate or not,” the country branch says, saying that some of the phrases were incorrectly translated.
However, a Chinese miner by the name of Akira Cui recently said to the South China Morning Post that an increasing number of miners “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 [mining] business blueprint is bound to go overseas, even if there’s only a 1 percent possibility that China’s crackdown against bitcoin would extend to mining.”
Mr. Cui was the only respondee, as most representatives of mining companies in China rarely spill what they do in media, with a majority of them choosing to be private. “No one brags about it because it’s best to make a fortune in silence,” Mr. Cui said.
Chinese Miners approximately make up 70 percent of Bitcoin’s total mining power
The Chinese miner said he first became involved with the business back in 2013, right after he sold his previous company of broadband internet for 30 million yuan. The Chinese miner first provided a capital of about 5-6 million yuan into hardware for mining, which has since managed to grow into 100,000 machines. He also says that roughly 90 percent of the hardware he’s using is owned by friends as well as clients who pay him to maintain the equipment, saying that his clients oftentimes choose to have their gear stored at his place for maintenance and safekeeping, since the machines are noisy in general.
Mr. Cui says that each machine can produce about 100 yuan in profit everyday, which means that in case the crackdown does fall upon large and small-scale miners alike, the financial losses will be hard to recover from. As such, increasing numbers are already looking for opportunities abroad, instead of waiting for it to happen.
Who Holds the Power?
Mr. Cui also said that they are already discussing with various partners in Los Angeles, as well as visiting Russia and Vietnam to check for sites with potential. He goes on to say that if the ban does happen, it will only take them three months before operations start again, this time overseas. According to Mr. Cui, the capital they will spend on getting new land pales in comparison with the profits they earn from the whole business.
Interestingly, Mr. Cui speculates that there may be a silver lining on the crackdown of China on their community for cryptocurrency. “It is important for bitcoin to [reduce its dependence on] China so it can become stronger, as was already proven in its latest price surge,” he argues, saying that China’s firm grasp on the digital currency is stopping it from the full utilization of its decentralization.