The shift of Bitcoin mining from East to West

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To become a successful cryptocurrency miner, you need to minimize running costs. Operating in cooler climates and areas with low utility costs are some of the practical ways to reduce the expenses. It comes as no surprise that many large-scale mining operations are active in regions with cooler climates and affordable power.

Mining farms come with thousands of compact hardware units, which make it easier to transport from one place to another. These units allow miners to shift from one region to another in search of ideal operating conditions. Additional factors that determine the suitability of a region or country for bitcoin mining include regulations.

Regional dynamics

While many developed countries provide easier access to new generation mining equipment and higher internet speeds, developing nations like Venezuela offer cheaper electricity. Residents often benefit from access to subsidized power sources. However, miners may rely on older hardware, such as the Antminer S9.

Miners in countries like the United States stay ahead of the curve thanks to their ability to raise capital. These operations often take advantage of mining consultation, hosting, training, and technical support services offered by companies like D-Central.

On another level, miners in China are faced with considerable challenges since the authorities have made cryptocurrency mining difficult. The Chinese government routinely cracks down on mining operations and digital currency exchanges.

For its part, the US government continues to take a proactive approach. It is working tirelessly to regulate activities in the industry. The approach will most likely make a huge difference in shaping the future of bitcoin mining in the United States.

The difference in approach between China and the United States became evident for some companies in the cryptocurrency industry. Bitmain and Ebang, two of the most prominent Chinese Bitcoin mining equipment manufacturers, reportedly faced a brick wall after submitting applications for listing to the Hong Kong Stock Exchange.

Hardware shutdowns

According to recent reports, over 40 established cryptocurrency mining operations in China discontinued activities due to profitability issues. The operations relied heavily on older generation Antminer equipment. Unfortunately, these units can no longer operate profitably. Globally, approximately 2.3 million Antiminer S9s have ceased operating.

A combination of old-generation equipment and the significant drop in the value of Bitcoin (BTC) has created unfavourable conditions. On the other hand, the cost of energy in China ranges between 0.03 and 0.05 USD per kilowatt-hour (kWh).

Miners paying $0.04 per kWh can operate profitably if the price of Bitcoin hovers above $5,100 at the time of writing. Our experts at D-Central have noticed that while Asian pools lost hash, North American pools maintained their activity levels.

Crypto mining in China

Chinese miners found it difficult to source replacement equipment for the unprofitable Antiminer S9s. The difficulty was due to the disruption of supply chains as manufacturers shut down due to coronavirus outbreak.

The disruption to global supply chains created a gap as miners failed to replace old rigs quickly enough. Chinese Bitcoin miners are anxious to get hold of next-generation hardware to restore profitability. Covid-19 has also negatively impacted the secondhand market for mining rigs. A senior Chinese official from the Blockchain Commission, which falls directly under the Ministry of Commerce, noticed the trend.

The deputy director of the commission highlighted the difficulty experienced in the production of mining machines as a clear effect of the pandemic on the industry. Miners are also finding it difficult to maintain and renew equipment.

It comes as no surprise that many miners put mining machines for sale following the price plunge that occurred on the 12th of March 2020. As an increasing number of miners sold their machines, the resale price fell by between 30 and 50 percent when compared to before the Spring Festival.

China’s dominance as a leader in the cryptocurrency mining industry could change shortly. The changes may be triggered by the repositioning of other markets, which provide ideal conditions for both large- and small-scale mining operations. For several years, China has benefited from affordable electricity prices and the presence of established rig manufacturers, such as Ebang and Bitmain.

These two factors enabled advanced Bitcoin mining operations to flourish. Players in the market gained access to new generation hardware quickly and easily. Likewise, smaller operators acquired secondhand devices at affordable prices and the equipment lasted for lengthy periods.

D-Central cryptocurrency mining services

D-Central offers professional support services to miners. From consultancy services and hardware repair to training, you can rely on the firm to enhance your Bitcoin mining operations. Its shop provides access to a wide variety of products, including merchandise, replacements parts for hardware, rigs, full Bitcoin nodes, and wallets.

Many customers in North America count on D-Central for hosting, brokerage, mining support, and other services. The company has a mining facility designed to handle Bitcoin research and mining activities. It uses the facility to provide reliable and affordable hosting services. D-Central ensures that customers’ hardware is managed efficiently without the need for miners to lose control of their units.

When it comes to mining hardware repairs and support, the company’s technicians can conduct diagnostics and perform repairs. On another level, the firm also provides technical assistance when faced with mining complications. Taking advantage of the service makes it easier to run your Bitcoin business efficiently and profitably.

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Disclaimer: The information provided on this blog is for informational purposes only and should not be taken as any form of advice.

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