Bitcoin mining industry is “dead” in China

China’s strong hand with Bitcoin mining has caused mines in the country to close or move abroad. Along with that, the country’s Bitcoin mining equipment manufacturers must also look elsewhere.

Last Friday, the Chinese government announced that it would strictly handle all acts of mining and trading virtual currencies, causing the mines to stop all or part of their operations. Up until this point, China accounted for more than half of the global Bitcoin supply.

Manufacturers of Bitcoin mining equipment, including many Chinese companies, say they are looking for growth opportunities in other markets because the opportunities in the Chinese market are almost nonexistent.

Ebang International, a company based in Hangzhou, said that “ our Bitcoin mining products are still sold out ” in overseas markets, despite domestic sales falling to zero. In addition, during the period In the future, “ our domestic customers will also move their operations abroad for mining, so the impact will not be large ”, Ebang is optimistic.

Reflecting the same trend, Shenzhen-based BIT Ming Ltd said it had signed an agreement with a partner in Kazakhstan to jointly invest in a virtual currency mining data center in the Central Asian country.

Bitcoin miners use increasingly powerful, specialized computing equipment called “rigs,” to verify Bitcoin transactions in a process where new Bitcoins are created. out.

Speaking to Reuters news agency, Alex Axo, Vice President of Innosilicon Technology, said that if China quickly loses its computing power in virtual currency, overseas Bitcoin mining pools will benefit.

“ Places like North America and Central Asia have advantages in terms of power supply and policy support, ” Axo said, noting that more Bitcoin mining pools will move operations from China abroad.

The Chinese government announced that it will strictly handle all acts of mining and trading virtual currencies, causing the mines to completely or partially stop operations. Up until this point, China accounted for more than half of the global Bitcoin supply.

Edward Lu, Vice President of Canaan Inc., another Chinese Bitcoin mining company, said it is also targeting the North American and Central Asian markets. “ The necessary strategy is to develop markets such as Kazakhstan, Canada, and Northern Europe, where energy resources are abundant and cheap, and supervision regulations are also clear and predictable, ” Lu said. Reuters.

On Tuesday, China’s Inner Mongolia region – the “capital” of the country’s Bitcoin mining industry – published a draft regulation aimed at bringing virtual currency mining to a complete halt. However, other parts of China have not yet introduced similar regulations, although Vice Premier Liu He has directed to ban all mining and trading of virtual currencies.

“ Moving overseas is just a ‘plan B’ for Chinese cryptominers, ” said Winston Ma, a professor at New York University’s School of Law. Ma also suggested that only the largest Bitcoin mines in China can smoothly withdraw abroad.

Kazakhstan, which just announced regulations for the cryptocurrency mining sector last year, hopes the industry will be a boost to the country’s economy, which is heavily dependent on oil.

“ We were asked by three Bitcoin miners from China on Monday that they wanted to put mines in our place ,” said Hive Mining co-founder Didar Bekbauov. This Kazakh company is a provider of “hotels” where Bitcoin mining systems are located.

According to Mr. Bekbauov, it seems that Bitcoin mines from China are looking for a new destination after the authorities’ ban.

However, some Bitcoin mine owners in China expressed anger at having to move. “ As long as Bitcoin mining is not illegal, you should not kill the industry with just a few words of an official like that, ” said a Chinese virtual currency businessman who asked not to be named.