Recently, as the State Council’s Financial Stability and Development Committee issued a document mentioning the crackdown on Bitcoin mining and trading, China’s Bitcoin mining industry has been making trouble for a while.
The Inner Mongolia Development and Reform Commission announced the “Eight Measures to Resolutely Combat and Punish Virtual Currency “Mining” (Draft for Solicitation of Comments)”, which made many practitioners feel reluctant.
In just a few days, although no more provinces have introduced policies against Bitcoin mining, the topic of computing power going to sea has still become the hottest topic in the circle. Should the computing power go to sea? Which country should I go to when I go to sea? It’s not just miners, but these issues are getting a lot of attention in the entire cryptocurrency industry.
China’s computing power may have fallen below 50%, and Bitcoin’s computing power has emerged in the world’s three major centers
In March, at the 2021 Bitmain Partner Summit, a sentence from Zhan Ketuan can summarize the current status of the global Bitcoin computing power market today: the computing power pattern is on the eve of a huge change. The scale of overseas computing power is gradually expanding, and mining concept stocks are gradually emerging in the US capital market.
In fact, according to incomplete statistics, since the halving, domestic computing power has gradually dropped from 70% to 50% of the world’s total computing power. On the contrary, the proportion of computing power in the United States rose to about 12%. Russia and Kazakhstan each account for 6% of the computing power of the entire network.
This means that Bitcoin’s computing power is gradually splitting from one center in China to three major centers in the world, China, North America and Central Asia.
The growth of computing power in North America is even more rapid. For example, the Foundry USA mining pool has risen rapidly and has entered the top ten in the world, and it has recently undertaken a lot of overseas Bitcoin computing power. For example, after Musk published his views on the energy consumption of Bitcoin mining, it was recently revealed that Musk had met with a group of mining companies in North America, and the miners agreed to establish a Bitcoin Mining Council. This is exactly a breakthrough in the US computing power market’s search for a global voice.
In fact, before the recent announcement of China’s mining policy, the globalization of mining, or the globalization of China’s computing power, has already begun. The current policy environment will accelerate this process to a large extent.
Where can China’s computing power go to sea? Places with good compliance and large scale are preferred
China’s computing power is speeding up to sea under policy pressure, where can it go? The answer is actually more obvious. The main directions are North America, the Middle East, and Central Asia.
The advantages of North America are relatively stable policies, a high degree of compliance, and a good investment environment. In the Middle East and Central Asia, electricity costs are relatively low.
But the shortcomings are not without them. The overall cost in North America is too high, and the United States has 20% tax pressure. The Middle East and Central Asia also have issues such as policy stability and compliance.
An early participant in Bitcoin, Mint Capital, the founder of Wonder Capital, which invests in mining companies such as Wonderful Mines, told Babbitt that there are difficulties in going out to sea. One is the cost issue. The other is that many domestic miners are actually concerned about overseas policies, laws and local conditions. Unfamiliar, this requires a familiar process.
Another senior practitioner analyzed that mining unions of different sizes have different considerations when it comes to going to sea. Large-scale mining unions pay more attention to compliance, so they will pay attention to North America, Europe, and Kazakhstan in Central Asia, the three relatively stable and friendly regions. In addition, a large number of miners will also pay more attention to the scale of power in the area they move into. For example, a load of 100,000 kilowatts is a threshold.
He also mentioned that there are also some small-scale mining power markets in Georgia, Uganda, Angola, Rwanda, and Thailand, but these all depend on the choices and abilities of different individuals.
“The mining machine is an unacceptable market choice, but I don’t think everyone wants to take this step until the end. Miners are looking forward to domestic policies. In a very loose financial innovation environment, it can give birth to Many excellent companies, such as the supply chain of chip research and development and mining machine manufacturing, drive the development of upstream and downstream industries. It is also possible that because the industry is overheated, these upstream and downstream companies may be reversed. For example, many hard disk suppliers do not provide hard disks. , Are used for mining. A moderate crackdown on overheating is necessary and is conducive to the long-term development of the industry. But we don’t want to encounter the same one-size-fits-all approach as in 1994. Many people have already analyzed that one size fits all in one industry. On the contrary, it is not conducive to supervision, and many industrial chains have gone underwater, which has increased the difficulty of supervision.” Mint said.
The policy may be about to be implemented, and the mining industry is bound to change
On the 27th, the Sichuan Regulatory Office of the National Energy Administration will hold a seminar on virtual currency “mining” on June 2nd. The news went away. In the eyes of many people, this means that there may be some room in Sichuan. But in any case, China’s mining industry has already faced a very unfavorable situation, and the policy risks are obvious. Some practitioners believe that the time for the implementation of the mining policy may be next week.
However, at present, industry practitioners are seeking a way out on the one hand, and on the other hand, they are still hoping that the supervision will be implemented as soon as possible, take a look at the specific supervision rules and make business adjustments.
Mint said that at present, Wonderful Mines are mainly mining with their own funds. They are more optimistic about the future development of the country. On the one hand, they patiently wait for the implementation of policy supervision, on the other hand, they are also actively promoting the construction of Canadian mines.
According to data from QKL123, the current hashrate of Bitcoin’s entire network is currently around 150E. Since the release of relevant documents, there has not been a waterfall-like plunge. This may indicate that these documents did not cause a large-scale shutdown of the entire network. However, practitioners have reported that mine closures exist.
In addition, although the price of coins has plummeted, the price of mining machines has not fallen so much. There are many long-term miners who are still collecting mining machines. The miners’ machines have also been sold until 2022. Considering the very limited chip production capacity, these two years have been the second best prime time for the mining industry since 2008.
However, according to Mint, the power supply must guarantee people’s livelihood and the production of the physical industry. Everyone may be able to overtake this year’s wet season, but the dry season must go to the sea. Now domestic energy is not enough in the dry season. This means that practitioners still have a few months to run away.
In any case, de-sinicization of computing power is an inevitable trend in the development of Bitcoin. Mining is a market-oriented industry, and it will go to a place with more stability, lower cost, and more complete supply chain. This is a process of dynamic equilibrium and gaming. But at present, China is still the best choice for mining. There is the most complete mining supply chain here. From the research and development of mining machine chips to all the electronic components needed for power supplies and accessories, it has the world’s most abundant clean energy. There are also a large number of well-trained miners.