Why Chinese Miners Want to Bet on Moving to US
Despite the several disadvantages besetting the expansion of his Bitcoin mining operations to the United States following China’s renewed crackdown on their business, a well-known Chinese bitcoin miner says he is still considering opening Bitcoin farms in Tennessee and Texas.
In an interview with the Washington Post, the CEO of BTC.TOP, Jiang Zhuoer, outlines too many “environmentalists who worry about wildlife and the birds,” and too much “White liberal idiocy” related to climate change in the U.S. He also cited an estimated six times higher cost of electricity in the U.S. than in China and how he would have to pay higher wages to his I.T. staff as against in China. Yet, he insists on the move.
“You know they’re getting serious when they set up snitching hotlines,” Jiang said, supposedly referencing Chinese authorities. Inner Mongolia recently announced it has created reporting channels to enable “mass supervision and protection” to address what it describes as the cryptocurrency mining enterprise problem.
Jiang is choosing to bet on the U.S. because he feels it seemed less risky than the Middle East where he reportedly had operations shut down by authorities or Russia where his colleagues’ computers have been seized. “A change in government policy that suddenly forces out all miners — that would never happen in America,” he adds.
Now all the mining facilities in Xinjiang, Inner Mongolia and Qinghai provinces have been shut down, only hydropower mining farms in Sichuan are left. Currently the clean energy usage by #Bitcoin miners ⛏️already exceeds 50%. 😁 https://t.co/3jeFSXxy0R
— Jiang Zhuoer BTC.TOP (@JiangZhuoer) June 16, 2021
Things have been moving very fast in China’s crypto mining space lately. Jiang notes on June 16 that all the mining facilities in Xinjiang, Inner Mongolia and Qinghai provinces have been shut down leaving only hydropower mining farms in Sichuan. A day or so later, another report says Sichuan officially issued a document requesting power generation companies to immediately stop supplying power to crypto mining operations.
This and preceding moves have had a toll on the sector. Bitcoin Magazine reports that the hash rate of the Bitcoin network has declined by approximately 27% since May 15 due to the two challenges of a mining ban in China and a huge drop in the price of Bitcoin leading to many machines being shut down temporarily. The report adds that miners’ daily income also dropped from US$68m per day on May 10 to US$31m by June 17. Another developing story has it that Alibaba Cloud, China’s largest cloud service provider, has called cryptocurrency and mining companies registered in China to say it may have to cancel its domain name and server operation.
Meanwhile, another factor drawing Chinese miners to the U.S. is American officials initiating direct contact with them. Miami joined in the effort to attract Chinese miners as its mayor told CNBC that the city is working to lower the cost of electricity in order to entice Bitcoin miners and promoting their unlimited supply of cheap nuclear energy.
“We want to make sure that our city has an opportunity to compete,” . Mayor Francis Suarez said. “We’re talking to a lot of companies and just telling them, ‘Hey, we want you to be here.’”
While miners care most about finding the cheapest source of power to drive up their profit margins more than anything else, the mayor notes that they are also considering a mix of other incentives like enterprise zones specifically for crypto mining.