Despite the 2021 ban, many bitcoin miners have remained loyal to the post. Maybe not for long.
New exodus of Chinese miners?
Chinese miners produced around 60% of the world's hashrate before the ban, compared to around 15% today.
China is therefore still number 2 in the world, behind the United States which takes 38% of the pie. Russia, with 12%, should soon overtake it.
In his last paper “The surprising story of Chinese Bitcoin mining”Daniel Batten states that “the minors were driven out of coal-fired power plants to meet the government's CO2 emissions targets. »
However, many individuals have not thrown in the towel. And this despite the fact that it is not profitable given the price of electricity. Mining at a loss is not a problem for those who want to use their bitcoins to circumvent capital controls.
“Why mine at a loss? It's simple: to get money out of China, or to convert the yuan into dollars. They convert Chinese yuan into ASICS and electricity, which helps generate BTC which can then be converted into dollars,” says Daniel Batten.
Let us remember that there are no longer any exchanges in China. Bitcoins are only exchanged P2P.
Miners with relatively large installations are only tolerated if they consume electricity produced by small hydroelectric plants not connected to the network (“off grid”).
All that being said, Chinese provincial governments are sometimes flexible. Daniel Batten cites the example of a miner (13 MW, or ~3,500 ASICs) working in tandem with a provincial government happy to recycle heat from ASICs for free.
In fact, 95% of the energy consumed by ASICs is dissipated in the form of heat. What is this (free) heat for? To heat water for fish farms. This is the future for bitcoin miners who, sooner or later, will no longer be able to afford not to exploit this heat.
As the halving approaches, hashrate from China will likely decrease further. Chinese miners are already rotating to Ethiopia where electricity will come exclusively from the Great Renaissance Dam.
There is also a good chance that the hashrate will decrease in North America. The miner BitFarms, for example, recently took up residence in Paraguay, near the Itaipu dam.
Don’t miss our article on this subject: Bitcoin – Exodus of American miners?
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
