With rumors surrounding the possibility of a nationwide ban on bitcoin mining, Chinese bitcoin miners and mining pool operators have started to consider relocating to other regions with cheap electricity.
In an interview with the South China Morning Post, Chinese miner Cuistated:
“Many of us have already paid visit to Vietnam, Laos, Thailand, Russia and the US, negotiating electricity prices with local authorities and buying sites for future use. The business blueprint is bound to go overseas, even if there’s only a 1 per cent possibility that China’s crackdown against bitcoin would extend to mining.”
Earlier this month, Sichuan Electric Power Company, a county electric grid operator, falsely announced that electricity providers within the region have been banned from providing services to bitcoin miners.
CnLedger, a trusted cryptocurrency news source within the Chinese cryptocurrency community revealed that Caixin, a state-owned news publication, confirmed with the Chinese government that there is no truth to the rumours:
“The head of that company has clarified that they made mistakes on the statement, as they are not a government administrative department, and have no rights to determine whether bitcoin mining is illegal,” wroteCnLedger. “However, head of the company clarified to Caixin today that the notice was made in a hurry; it is not their role to determine whether bitcoin mining is against the law. Actually the company is not yet connected to national grid, and relies on local stations to get electricity.”
Conclusively, the rumors around a potential bitcoin mining ban hinted by some regional electric grid operators were directly refuted by major grid operators and Chinese officials, eliminating the possibility of a nationwide ban on bitcoin mining in the short-term.
However, due to uncertainty, Chinese miners including Cui are actively considering relocating their mining centers to other countries that have friendly regulatory frameworks and practical policies for both the bitcoin mining industry and the cryptocurrency sector.
Lately, the Russian government has begun to provide the necessary infrastructure and regulations for bitcoin miners. There already exists a couple of large-scale bitcoin mining centers in Russia thatdrive millions of dollarsin profit each month with relatively high-profit margins, due to the low price of electricity in the country.
Given the Chinese government’s unpredictable nature and the crackdown on Bitcoin exchanges which significantly restricts the ability to sell bitcoin in the local market, it is plausible that miners will relocate to regions that provide a better ecosystem for miners.
The South China Morning Post reported that three major mining firms declined to participate in an interview, and Cui also declined to provide the name of the mining firm he oversees, to prevent scrutiny over deals with local utility companies in the future. Cui further emphasized that bribery is common in the global bitcoin mining industry.
“No one brags about it because it’s best to make a fortune in silence,” he added.