Facing pressure from the Chinese government, bitcoin mining collectives are shifting their operations overseas, Bloomberg reports.
Bitmain, which runs China’s two largest bitcoin-mining collectives, is setting up a regional headquarters in Singapore and has expanded its operations to the U.S. and Canada. Another mining pool, BTC.TOP, has also chosen to open a facility in Canada.
Their decisions highlight how China’s role as the cryptocurrency leader is diminishing, as its government clamps down on mining operations.
This week, government leaders outlined plans to discourage bitcoin mining in the country. Officials there plan to guide miners toward an “orderly” exit from the business, people familiar with the matter said.
Until recently, China’s bitcoin mining industry flourished, with the country’s cheap labor, inexpensive electricity and chip manufacturing capabilities. But with the latest directive, which comes on the heels of news that the Chinese government will ban ICOs and shutter bitcoin exchanges, mining collectives are seeing the benefits of operating elsewhere.
“We chose Canada because of the relatively cheap cost and the stability of the country and policies,” BTC.TOP Founder Jiang Zhuoer told Bloomberg, adding he also considered locations in Iran and Russia.
Had BTC.TOP moved its business to Russia, the company would have hardly been the only cryptocurrency mining operation there. Russian President Vladimir Putin’s co-owned company, Russian Miner Coin (RMC), has said that it would throw its hat into the ring and challenge China’s dominance in cryptocurrency mining.
Russia’s determination to become a dominant player in cryptocurrency is strong. Last year, Putin’s internet ombudsman said, “Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.”
As Russia expands its efforts, RMC is looking to minimize power consumption in computers for virtual currency mining by using Russian-designed semiconductor chips in satellites. In a presentation last year, RMC said Russia had an extra 20 gigawatts of power and lower consumer electricity prices than China.