Notebookcheck Logo

The Bitcoin mining ban started a fire sale on Chinese miners, FT investigation reveals where they went

China's mining rigs popped up at unexpected places (image: Christian Wiediger, Unsplash)
China's mining rigs popped up at unexpected places (image: Christian Wiediger, Unsplash)
When China banned Bitcoin mining, panicked local firms went into a fire sale mode for their rigs. The bulk of the crypto miners went to Russia, followed by Kazakhstan, the US, Canada, Paraguay, and even Venezuela. The more expensive rig models ended up in more developed countries, whereas mining in Caracas seems to be a poverty alleviation strategy, made profitable on older power-hungry Chinese miner models by cheap electricity.

 

The world of Bitcoin mining went into a frenzy earlier this year when China banned miners and forced them to take their rigs out of the country. While we thought that the US was one of the biggest beneficiaries of the move, Texas electricity prices and all, a new Financial Times research tells us exactly where some of the two million Bitcoin mining rigs went when they got turned off in China. It turns out that the US got a little less than Kazakhstan - 87,200 vs 87,849 - while the lion's share of 205,000 machines went to Russia. Canada is the fourth most preferred destination for cryptocurrency mining, followed by countries like Paraguay and Venezuela with lax rules and cheap electricity.

The fire sale that the Chinese Bitcoin miners got forced into led to a severe drop in the price of one popular rig - the Antminer S19 - which fell 42% in just a few short months. Still, over 700,000 machines have been sitting in storage in China, turned off since the enaction. Those are mainly older, cheaper models that ultimately made the bulk of the shipments to Venezuela and Paraguay. For Juan Jose Pinto who founded the Bitcoin mining firm Doctor Miner in Caracas, the Chinese ban has been a boon given Venezuela's one cent per kWh electricity prices:

We’ve been contacted by three different big Chinese miners so far to host around 7,000 machines. If we had the resources we could host a lot more.  We have what we call ‘the cemetery’, where we put miners that aren’t working, but have parts which are. If I have one machine with four broken parts and another machine with six broken parts, I unite them and hopefully build one good miner.

Moreover, Bitcoin mining turned out to be a poverty alleviation strategy for sanction-stricken Venezuelans, an opportunity that is not available in more developed destinations for the Chinese mining rigs, according to Mr. Pinto:

People mine in their houses with just one machine. In other countries, there are a few big guys with farms, here there are thousands of people with small farms. Making $100 extra per month makes a huge difference for them.

Get the AntMiner L3+ 500MH/s Litecoin Miner on Amazon

Russia, Kazakhstan, the US and Canada scooped the bulk of the Chinese crypto mining rigs

Source(s)

FT (paywall)

Read all 2 comments / answer
static version load dynamic
Loading Comments
Comment on this article
Please share our article, every link counts!
Mail Logo
> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2021 11 > The Bitcoin mining ban started a fire sale on Chinese miners, FT investigation reveals where they went
Daniel Zlatev, 2021-11-22 (Update: 2021-11-22)