The Chinese government has revealed plans to discourage bitcoin mining by limiting power use for the purpose. In view of the looming state crackdown on their business, some of the largest bitcoin miners have decided to shift their operations overseas, Bloomberg reports.
Bitmain, which runs China’s two largest bitcoin mining collectives, is setting up its regional headquarters in Singapore and now has mining operations in the United States and Canada, the company’s co-founder, Wu Jihan, told Bloomberg.
Also, BTC.Top, the country’s third-biggest mining pool, plans to open a facility in Canada, while ViaBTC, the No. 4 player, is already operating in Iceland and the US, Bloomberg reported.
Cheap electricity is a major advantage for bitcoin miners in China, attracting even foreign miners to flock to the country.
The computing process that completes transactions and creates new crypto-tokens requires vast amounts of electricity – between 8.27 terawatt-hours a year and 37.22 TWh a year – nearly the amount used in Estonia or Peru, Bloomberg said.
However, the days of cheap coal-fired power in the country may soon be over for bitcoin miners.
Last week, the People’s Bank of China (PBOC) announced plans to investigate whether the power use of bitcoin miners has distorted local power prices, a move that may prompt cryptocurrency miners to exit the business.
“We chose Canada because of the relatively cheap cost, and the stability of the country and policies,” Jiang Zhuoer, founder of BTC.Top, told Bloomberg, adding that Iran and Russia are two other possible options.
“While the moves are unlikely to have a noticeable effect on bitcoin transaction speeds, they could reshape the cryptocurrency mining industry,” Bloomberg said.
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