No More than 60% Miners Remain in China, 80% of Them Center in Sichuan
Crypto miners suffered a lot from the recent market crash, especially for those located in regions with high power cost, for example, China. It was reported that many Chinese miners have shut down their mining machines as the mining profit cannot cover the electricity cost.
In the previous weeks, a footage showing “crypto miners were sold by kilo in China” has shocked the whole crypto community. While some miners choose to quit their mining business, the other miners are supposedly moving from China to counties where power cost is relatively cheaper, according to Coinshare’s latest report.
All these above shows the worldwide mining distribution is changing.
CoinShares, the crypto asset investment, and research platform recently launched a new industrial report titled The Bitcoin Mining Network—Trends, Marginal Creation Cost, Electricity Consumption & Sources, mainly analyzes the changing trends within the crypto mining industry.
It is commonly believed that most Bitcoin mining centers in China. CoinShares report also cautiously agree with this but the proportion is not as large as it used to be. It estimated that,
“No more than 60% of miners currently remain within Chinese borders,” while most of them are “mainly situated in a handful of provinces such as Sichuan, Yunnan, Guizhou, Tibet, Xinjiang, Western Inner Mongolia. Among them, Sichuan is the mining center where we estimate 80% of the Chinese miners are located.”
CoinShares also indicated that these locations are not chosen at random. The key consideration driving the location decision for miners is the presence of low-cost electricity, high-speed internet, as well as the low temperatures that reduce the need for the additional cost of cooling.
However, with the current market conditions, crypto mining is no longer a highly profitable business. Plus power supply shortage as a result of the current dry season in Sichuan, miners found that if they keep operating their mining rigs in China, they may face a significant loss.
According to CoinShares report, miners were leaving China or choosing not to reinvest within China, in significant numbers. Instead, they are setting up operations in certain regions of Scandinavia, Russia, Canada, and the United States, in order to seek the combination of cheap abundant electricity, friendlier regulation, fast internet connections, and cooler climates.
In addition, the report also highlighted that the vast majority of global Bitcoin mining capacity (minimum 77.6%) is running on the renewable way, that means, at least in terms of the environment, cryptocurrency is doing no harm and the mining business is greener than most other large-scale industry in the world.