Why are Bitcoin mines going overseas one after another?

According to reports on January 5, with the introduction of regulatory measures one after another, China’s policies on Bitcoin mines continue to tighten, and some of the largest players in the industry who are crazy about “mining” have already Move business from China to overseas.

According to reports on the 5th, Wu Jihan, co-founder of Bitmain, which operates China’s two largest Bitcoin mines, said in an interview that the company is setting up a regional headquarters in Singapore and one in the United States. and Canada to conduct mining operations. In addition, the third largest mining farm BTC.Top is opening a branch in Canada, while the fourth largest mining farm ViaBTC has also established operations in Iceland and the United States.

Lebit founder Jiang Zhuoer said in an interview that he chose Canada because the cost is relatively low and the country and policies are stable. He also considered Iran and Russia.

A Bitcoin mine in Ganzi, Sichuan?

In September last year, China suspended all Bitcoin trading businesses. Subsequently, there were constant reports of the leading group for special rectification of Internet financial risks. The office (hereinafter referred to as the "Mutual Finance Rectification Office") held a meeting to discuss the issue of guiding the mine to exit. According to sources familiar with the matter, on January 2, the Mutual Finance Rectification Office issued documents to various localities, requiring companies within their jurisdiction to actively guide them to withdraw from the Bitcoin mining business in an orderly manner, and to report work progress regularly.

Notice from the Mutual Finance Rectification Office

Although these measures are unlikely to have a significant impact on Bitcoin transaction speed, they may reshape the cryptocurrency mining industry. Bitcoin mining farms have been flocking to China until recently due to its low electricity prices, local chip manufacturing factories and cheap labor. Now, they are looking for other suitable locations.

According to reports on the 4th, people close to the Mutual Finance Rectification Office said that local governments have scaled back previous preferential measures by adjusting electricity prices, land, taxation and environmental protection policies. In addition, they are also required to regularly report the status of “mining” companies within their jurisdiction.

Different from virtual currency exchanges, Bitcoin mines that produce Bitcoin use professional Bitcoin mining machines to use power consumption to generate computing power for mining, and they are more industrial in nature. rather than financial attributes. The compression of Bitcoin mines does not require local governments to forcefully shut down mines. It mainly emphasizes that policies should not reward or over-incentivize mining.

How much electricity does Bitcoin “mining” consume? In November 2017, the analysis company Digiconomist released a set of data showing that the current global annual electricity consumption generated by Bitcoin "mining" is estimated to be 29.05TWh, or 29.05 billion degrees, accounting for 0.13% of the world's total electricity consumption. In terms of countries, it ranks 61st in the world. And in the context of the current surge in Bitcoin, power consumption increased by as high as 26% in November 2017.

According to an industry research report released by Cambridge University’s Garrick Hileman and Michel Rauchs in April last year, 58% of the world’s Bitcoin mining factories are located in China, while the second-ranked United States only accounts for 16%.

According to sources quoted from authoritative sources, the annual electricity consumption of mining in the country can be used by 50 million residents based on incomplete statistics alone.

The Bitcoin mine map is from the "Quartz" website

Therefore, areas suitable for mining generally have the advantage of cheap electricity prices, and secondly, low regional temperatures are required to facilitate heat dissipation of mining machines. From a global perspective, the countries that best meet the above conditions are mostly located in areas with high latitudes or high altitudes and rich hydropower and thermal power resources, such as Russia, Canada, Iceland, etc.

According to recent reports, a large number of digital currency investors from all over the world regard Winnipeg as the best place to open a mining farm. Among the 20 major cities in North America, Winnipeg has the lowest electricity prices, with electricity prices in New York, Toronto and other places close to three times that of Winnipeg. Moreover, the average temperature in Winnipeg is below 10 degrees Celsius, which is very suitable for mining machine heat dissipation.