Miners leaving China: what to expect?

In one of the last articles, we discussed the central banks of several countries introducing their own governmental crypto currencies, thus, compromising independent miners. Another threat to global distribution of mining power is now coming from China that historically has been home to more than 65% of the world’s bitcoin mining as of April 2021. This time China’s officials stated that crypto mining did not meet the climate targets and contradicted the carbon neutrality.

The majority of mining farms in China are located close to self-generated power supplies — specifically, coal plants. To generate electricity plants of this kind burn coal which results in significant air emissions. The crackdown on using coal power for mining puts at risk the existence of many players in the regional crypto market.

Under the conditions of rigorous governmental policy, Chinese miners are incentivized to search for alternatives to relocate their businesses. One of these alternatives is Kazakhstan — China’s next-door neighbor responsible for around 36% of world’s bitcoin mining.

According to the head of Enegix, one of the key companies on the Kazakh energy market, miners can buy electricity at 0.03 USD per kW/hr. Besides that, due to a cooler climate in Kazakhstan miners will have an opportunity to cut air-conditioning costs, which eventually will reduce mining energy consumption by 30%.

Nowadays Energix is actively constructing data-centers in Kazakhstan. In the end of 2020, the company put up its largest object — 180 MW data-center close to Ekibastuz in the Northeast of the country.

Besides that, the company has announced they have been receiving multiple cooperation offers from Chinese miners recently.

However, the power capacity of Kazakh greed seems to be the matter of question. According to Bloomberg, in the past 20 years the generating capacity in the country has only grown by 3 GW.

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