{"id":282583,"date":"2021-06-24T11:37:57","date_gmt":"2021-06-24T08:37:57","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/chinas-crypto-miners-look-abroad-as-regulators-tighten-noose\/"},"modified":"2021-06-24T11:37:57","modified_gmt":"2021-06-24T08:37:57","slug":"chinas-crypto-miners-look-abroad-as-regulators-tighten-noose","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/chinas-crypto-miners-look-abroad-as-regulators-tighten-noose\/","title":{"rendered":"#China’s crypto-miners look abroad as regulators tighten noose"},"content":{"rendered":"

“#China’s crypto-miners look abroad as regulators tighten noose<\/strong>”<\/p>\n

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\"Crypto-mining
\n Crypto-mining requires huge amounts of processing power, as is seen at this bitcoin mining data centre in Canada.
\n <\/figcaption><\/figure>\n<\/div>\n<\/div>\n

When a prefecture in northwestern China’s Xinjiang region ordered a halt on cryptocurrency mining projects this month, Chris Zhu scrambled to move clients’ machines southward, spending over a week to reassemble in Sichuan.<\/p>\n

But after the shift, he received another notice\u2014authorities in southwestern Sichuan were also putting a stop to the industry, in a turbulent year that has lost his company millions.<\/p>\n

“We’re thinking of ways to go abroad,” said Zhu, whose company handles the maintenance of mining machines. <\/p>\n

He is among businessmen and miners now planning to seek their fortunes overseas\u2014in countries ranging from the United States to Kazakhstan\u2014as Beijing tightens the screws on the industry.<\/p>\n

Crypto-mining is the process by which computers generate a series<\/a> of complicated hexadecimal number sequences needed to mint new virtual currency and validate financial transactions\u2014a task that requires massive amounts of processing power.<\/p>\n

Chinese mines power nearly 80 percent of the global trade in cryptocurrencies despite a domestic trading ban since 2017, relying on the competitive advantage of cheap access to power and hardware. <\/p>\n

But several provinces have recently ordered the closure of mines.<\/p>\n

Mountainous Sichuan was China’s second-biggest bitcoin mining province, according to data compiled by Cambridge University that tracked the world’s largest digital currency.<\/p>\n

Authorities have also ordered shutdowns in the coal- and hydropower-rich regions of Inner Mongolia and Qinghai, with citizens encouraged to report illegal operations.<\/p>\n

More than 90 percent of the country’s bitcoin mining capacity has now been shut down, according to estimates published by state media<\/a> tabloid Global Times.<\/p>\n

Major relocation<\/b><\/p>\n

Zhu estimates that 10 to 20 percent of miners in China have started their move abroad.<\/p>\n

“We spent around 10 days getting to Sichuan, only for operations to stop there too,” he told AFP. “It’s going to be tough to continue here.”<\/p>\n

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\"Bitcoin,
\n Bitcoin, its miners and the blockchain.
\n <\/figcaption><\/figure>\n<\/div>\n<\/div>\n

Zhu’s company INBTC handled a 260-megawatt site in Xinjiang before being forced to pull the plug.<\/p>\n

“With the hit on Sichuan, we had nothing left,” he said.<\/p>\n

On Monday, US-listed Chinese firm BIT Mining announced it had delivered its first batch of 320 mining machines to Kazakhstan, after Sichuan authorities ordered power companies to stop supplying electricity to crypto-miners.
\n <\/p>\n

It will also ship its remaining mining machines abroad.<\/p>\n

Nic Carter, general<\/a> partner at Boston-based venture fund Castle Island Ventures, considers the situation “an effective terminal shutdown on mining in the country”.<\/p>\n

He said that 50 to 60 percent of the bitcoin hashrate\u2014a measure of the overall computing power used in the bitcoin network\u2014could be relocated out of China.<\/p>\n

“Everyone I’ve talked to, in China as a miner, is looking for hosting outside of the country,” said Carter.<\/p>\n

Central Asia, North America<\/b><\/p>\n

Industry players say Central Asia and North America are popular destinations Chinese miners are considering.<\/p>\n

“When you could mine in China, many people were not willing to go abroad,” said a Chinese miner surnamed Li, who has three mines in Kazakhstan.<\/p>\n

He said he moved his operations out in 2018 for cheaper electricity, and is now helping friends export “several thousand” bitcoin mining machines.<\/p>\n

Carter added that upstate New York is another popular destination, while Texas is often cited as a mining location. The southern state’s governor also has an accommodating stance to mining.<\/p>\n

“Miners are going to be taking that into account,” he said. “Historically, the biggest risk to them is not power prices… it’s political risk.”<\/p>\n

For now, industry players say the exodus has not quite started, with many still looking for suitable destinations.<\/p>\n

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\"Analysts
\n Analysts have pointed to financial risks and energy goals as reasons behind China’s crypto clampdown.
\n <\/figcaption><\/figure>\n<\/div>\n<\/div>\n

Energy, financial concerns<\/b><\/p>\n

Analysts have pointed to financial risks and energy goals as reasons behind China’s crypto clampdown.<\/p>\n

Bitcoin and other cryptocurrencies cannot be traced by a country’s central bank, making them difficult to regulate.<\/p>\n

Beijing is also believed to fear the proliferation of illicit investments and fundraising, with crypto transactions threatening controls.<\/p>\n

On Monday, China’s central bank said it told five major banks and payment giant Alipay to halt crypto-related transactions.<\/p>\n

“Virtual currency transactions and speculation disrupt the normal economic and financial order, breeding the risk of criminal activities such as cross-border asset transfers and money laundering,” it said.<\/p>\n

Another factor is energy consumption in mining, as Beijing forges ahead with plans to achieve net-zero emissions by 2060.<\/p>\n

Although miners in Sichuan often use hydropower to power their equipment, with some moving operations there in the rainy summer to tap these resources, China also relies on a particularly polluting type of coal to power some of its mining.<\/p>\n

Bloomberg predicted China will not be able to meet its cryptocurrency industry’s needs through renewable energy until 2060.<\/p>\n

Crypto-mining is expected to use 0.6 percent of the world’s total electricity production in 2021, according to Cambridge University data.<\/p>\n

With relocation underway, Carter of Castle Island Ventures said: “Transactions will clear more slowly, for a period of months probably.”\n <\/p>\n\n

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Bitcoin dives as China widens crackdown on crypto mining\n <\/p><\/div>\n

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\n \u00a9 2021 AFP<\/p>\n

<\/p>\n

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\n China’s crypto-miners look abroad as regulators tighten noose (2021, June 24)
\n retrieved 24 June 2021
\n from https:\/\/techxplore.com\/news<\/a>\/2021-06-china-crypto-miners-tighten-noose.html<\/p>\n

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