China's exiled crypto machines fuel the global mining boom

China's ban on mining cryptocurrencies in May triggered an exodus of miners and a global race by millions of chunky, performance -intensive machines that they use to solve complex puzzles and earn Bitcoin.

Fourteen of the largest crypto mining companies in the world brought out more than 2 million machines from China in the months after the ban, according to the data collected by Financial Times. The lion's share of the machines was hastily moved to the USA, Canada, Kazakhstan and Russia.

bit digital, one of the largest crypto mining companies listed in the USA, has commissioned an international logistics company to extract its property from China, and is still waiting for a batch of almost 1,000 machines to be released from the docks in the port of New York.

"We started our fleet migration in March 2020, which was a great step afterwards. When the ban was announced, we had 20,000 miners in China," said Sam Tabar, Chief Strategy Officer from Bit Digital. Nevertheless, the company said that it had to give up 372 machines in China that "had reached the end of their useful life".

eight of the ten largest public mega arms based in North America have expanded the number of machines in their fleets since the ban on China, as the FT numbers show.

When the ban was born, the crypto mining company Hut8 from Toronto was bombarded with offers from in panic Chinese sellers, said Sue Ennis, Vice President for Corporate Development and Investor Relations from the company. "We got calls from providers who were rather opaque and one -sided," she said. "You would ask us to pay $ 20 million without recourse if it doesn't matter or matters." The company added 24,000 machines from the Chinese company in June.

The "frenzied liquidations" triggered by the Chinese ban left the price of an Antminer S19, a popular model among industrial miners, from May to July by 41.7 percent, as analyzes of the mining company Luxor Mining.

The Chinese crypto mining machine manufacturer Bitmain, the manufacturer of the S19, had sold 30,000 machines to Marathon Digital Holdings, a mining company based in Las Vegas, in August; While Terawulf from Maryland bought another 30,000. The company announced in June that it will expose the sale of its machines to "facilitate the change of industry" and to reduce the "great pressure" on the market.

outside the USA, Kazakhstan has developed into a leading mining center. FT data show that the majority of the machines delivered to Kazakhstan comes from the Chinese mining company Bitfufu, which has delivered 80,000 machines to farms in Kazakhstan, and bit mining, which has delivered machines until August 7.849.

Another beneficiary of the Chinese ban was Russia, where the infrastructure hosting company Bit Cluster based in Moscow received over 5,000 machines from China in the weeks after the ban on the cryptocurrency mining, while the Russian crypto mining company Bitriver said that since the ban it has now been 1.8 million in exile Miners.

"The focus of the market has shifted from a lack of equipment to a lack of space for its placement," said Roman Zabuga, a spokesman for Bitriver. A few weeks before the ban, the company had to reject a deal with a Chinese customer who wanted to outsource another million machines, he said.

According to Jaran Mellerud, Research Analyst at Arcane Crypto, almost 700,000 Chinese machines were not switched on again after the ban and will probably sit in the warehouse. Since many of them are of the older generation machines, such as the Antminer S9, it is less cost -effective to send them to places like the USA. In July, the price of an S9 fell to only $ 367.

This has meant that machines of the older generation are scattered to less established mining locations such as Venezuela or Paraguay, where there are less regulatory stability, but cheap electricity prices.

Juan Jose Pinto, co -founder of Doctor Miner, a mining company in Caracas, said that the Chinese ban was "a great opportunity". "So far we have been contacted by three different large Chinese miners to host around 7,000 machines," he said. "If we had the resources, we could host a lot more."

pinto said his company pays about $ 0.01 per kWh for electricity, which means that it can effectively use older, more energy-hungry machines such as Antminer S9. Although these machines are rickety and more susceptible to breakdowns, Pinto and his team have found imaginative ways to keep them in operation.

"We have what we call 'the cemetery', where we do miners who do not work, but have parts that do it," said Pinto. "If I have a machine with four broken and have another with six broken parts, I unite it and hopefully build a good miner."

Digital Assets, a company based in Asunción, is preparing to accommodate 15,500 miners in the coming months, but sees itself exposed to the competition of some Paraguayan locals who have started to buy machines and to dismantle independently.

and due to the battered economy of Venezuela, the reduction of cryptocurrency is a way for the locals to improve their income. "People mines in their houses with just one machine," said Pinto. "In other countries there are a few large guys with farms, here there are thousands of people with small farms. Earning $ 100 per month makes a big difference for them."