Bitcoin Miners Migrate From China To Canada As PBOC Begins Crackdown
Content adapted from this Zerohedge.com article : Source
Bitcoin rangin the year Peter Thiel-inspired ramp following reports that the People's Bank of China is preparing to crack down on bitcoin miners.
In fact, Reuters reported that the PBOC had held a meeting about regulating bitcoin mining power use, an increasingly sensitive topic now that global bitcoin energy consumption is greater than what Qatar uses in a year.
Unfortunately for bitcoiners across the world, the PBOC has called for establishing limits on the energy used by miners, sending the bitcoin price lower. Before news of the crackdown broke, we reported late last month that Winnipeg City, Manitoba, could become a hub for crypto miners because of its exceedingly low power costs. Indeed, Winnipeg City has been rated the city with the lowest power costs in North America cryptocurrencies broadens to bitcoin miners, some of the industry's biggest players are shifting operations overseas.
While the moves are unlikely to have a noticeable effect on bitcoin transaction speeds, they could reshape the cryptocurrency mining industry. Miners have until recently flocked to China because of the country's inexpensive electricity, local chipmaking factories and cheap labor. They now have little choice but to look elsewhere.
Bitmain, which runs China's two largest bitcoin-mining collectives, is setting up regional headquarters in Singapore and now has mining operations in the U.S. and Canada, Wu Jihan, the company's co-founder, said in an interview. BTC.Top, the third-biggest mining pool, is opening a facility in Canada and ViaBTC, ranked No. 4, has operations in Iceland and America, their founders said.
The moves underscore how China's once-dominant role in the world of cryptocurrencies is shrinking as policy makers clamp down.
Meanwhile, the costs of bitcoin mining is expected to keep rising at a breakneck pace.
"We chose Canada because of the relatively cheap cost, and the stability of the country and policies," Jiang Zhuoer, founder of BTC.Top, said in an interview. He also considered locations in Iran and Russia.
Bitcoin, which surged 15-fold last year, climbed about 6 percent at 5:32 a.m. New York time.
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International investors have had interviews with "commercial real estate companies, economic development organizations, cryptocurrency industry players and Manitoba Hydro," who view the area as a "top-tier location" to open up a mining shop."
As we noted late last year, CBC News reported that international investors have had interviews with "commercial real estate companies, economic development organizations, cryptocurrency industry players and Manitoba Hydro," who view Winnepeg City as a "top-tier location" to open up a mining shop. CentrePort Canada, North America's largest inland port, offers 20,000 acres of cheap commercial land in Winnipeg.
This makes the area increasingly alluriarly interest from Asian investors and South American companies who want to mine cryptocurrencies is currently underway. CentrePort president and CEO Diane Gray said, "we've had inquiries from very large non-Asian companies, some of which have roots in North America and are looking to expand significantly."
"They're having site visits and meetings with Manitoba Hydro and whomever else they feel are relevant to their decision-making process. So I would say strong interest, but still speculative."
The environmental downside in mining cryptocurrencies is that it requires a tremendous amount of energy. As the CBC explains, a bitcoin transaction consumes a lot of energy. However, not every Canadian city offers such favorable conditions. For example, Toronto ranks last. New York is not too far behind Toronto, ranked number 19.
Interesting facts about Bitcoin mining and electricity consumption:
In the past month alone, Bitcoin mining electricity consumption is estimated to have increased by 29.98%
- If it keeps increasing at this rate, Bitcoin mining will consume all the world's electricity by February 2020/Estimated annualized global mining revenues: $7.2 billion USD (£5.4 billion)
- Estimated global mining costs: $1.5 billion USD (£1.1 billion)
- Number of Americans who could be powered by bitcoin mining: 2.4 million (more than the population of Houston)
- Number of Britons who could be powered by bitcoin mining: 6.1 million (more than the population of Birmingham, Leeds, Sheffield, Manchester, Bradford, Liverpool, Bristol, Croydon, Coventry, Leicester & Nottingham combined) Or Scotland, Wales or Northern Ireland.
- Bitcoin Mining consumes more electricity than 12 US states (Alaska, Hawaii, Idaho, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming)
- Growth of Bitcoin Mining Electricity Consumption is set to explode.
- Meanwhile, the cryptocurrency space has been extremely volatile since the new year, with traders rotating out of bitcoin and into Ripple Labs's Ripple token. However, that rotation has been thrown into reverse today, with Ripple down nearly 10 percentage points Friday afternoon.
Bloomberg News first reported the Chinese government's planned curbs on Wednesday. The People's Bank of China didn't respond to requests for comment.
I am surprised I haven't heard of a power station somewhere deciding to disconnect fromthe grid and opening a huge Bitcoin mining operation. Seems like the perfect way to have stable power consumption and I am sure it would be easy to raise investors money to cover the costs of setting it up.
I heard rumors that some of the local electric companies in China are actually miners.
I havent been able to verify but that notion is out there.
It does seem a logical way to go. They surely cant be beat on electricity prices plus power stations sometimes waste or sell under the cost of production in off peak hours
This topic is really very important
The "crackdown" by the Chinese authorities on the metal bitcoin will not cause them to be banned, but will rather focus on getting rid of their own treatment in the local provinces. Where Ciaxin reported that unlike rumors on Wednesday, the Chinese authorities have not asked the metal bitcoin to close their operations in the country. China is home to about two-thirds of the retail price of mining operations in Sichuan Province and autonomous regions of Inner Mongolia, which provide cheap hydropower and lower temperatures for the intensive process of energy use in digital coin mining.
A source of information on the movements of the organizers was also quoted as saying that "repression" would extend to the removal of mining centers near cheap hydropower. All preferential policies for electricity consumption, tax cuts and land use for bitcoin mining centers are under surveillance.
Bitcoin mine yet? Will Bitcoin mine be alive?
The report also found that, with the benefit of local communications, it may be possible to consume energy at a lower cost than some mining facilities. In addition, Wednesday's closed-door meeting between the People's Bank of China (PBOC) and members of the big regulator of Internet finance saw authorities move to regulate the use of electricity by some of the metals in the bitcoin network.
He also asked local government officials to investigate "non-standard uses of electricity" after concerns that high energy consumption could affect the natural use of electricity in the region in some cases. To oversee these constraints, the National Development and Reform Commission will participate as the country's energy supply regulator. As mentioned earlier, the "crackdown" on bitcoin mining in China could be more useful to the bitcoin system by making the country's key bitcoin fragmentation rates decentralized.
This is where the market will decide. People seem to think there is a big secret to all of this.
If the Chinese government bans or cracks down on the mining (presuming the local entities play along with the central regime which is no guarantee), it simply will move elsewhere. Somebody will step in and fill the void.
Of course, what is not talked about is China is one of the leading countries in terms of solar placement the last couple of years. Hence, these minors could simply shift to a solar powered system which would cut a portion of their energy usage.
In the end, the miners are making too much money which they are using to pay off the local officials. China is one of the leading countries in terms of corruption so nothing will go as planned. Besides, I heard rumors that some of the minors are the local electric companies.
So the idea that they will shut things down is absurd.
In China people tend to play along with the authorities, because if you don't - you might be missing the next day.
The local authorities have more control in China than the central authorities.
Until they are no longer convenient, then you can really see where power resides. But I am not chinese, so I can't really tell. Maybe you have better sources.
Makes me wonder if there's a more efficient(cheaper) way to ensure the ledger is good.
Sure there is...BTS and STEEM use a more efficient way without the use of miners.
Legal weed and free medical I would too!
Here is chart of countries have less consumption of electricity/year than Bitcoin mining consumption.
I hope some "high-ups" in the electricity field read this. Some of the #'s are mind blowing.
I always wonder how much energy the military (industrial complex) of all the "countries" in the world, use and destroy, when I hear those stories about bitcoin.