Greener pastures: Bitcoin miners now looking beyond Chinese borders

Chinese miners have recently migrated from the southern regions to the north, where electricity prices can be as low as $0.01.

The migration of Chinese crypto miners is a common practice that is mainly affected by the climate determining electricity costs.

Low temperatures in the northern regions are another factor contributing to the relocation of Chinese miners from the south.

Wishing to remain anonymous, a local crypto miner spoke to Cointelegraph on the matter, saying that while China has two mining hubs - one in Sichuan province and one Inner Mongolia, Chinese miners rely more on southern capabilities.

Taras Kulyk, senior vice president of blockchain business development at Core Scientific, a digital asset mining infrastructure provider in North America, revealed that Chinese miners have come to realize that the mass migration of units every season is not the most sustainable model.

According to Jiang, the increased number of institutional miners significantly affects the operation and maintenance requirements as well as investment decisions of original miners.

According to Ge, the mining market is entering an era of large-scale operation, increased specialization and financialization, so it has become challenging for smaller mining facilities to attract miners, as he told Cointelegraph: "Back in 2019, China accounted for more than 70% of the world's crypto mining market." However, he also added that following the bear market in 2019 and a sharp price decline in 1Q 2020, many miners with high-consumption rigs have exited the market.

Among the reasons, Ge highlighted the growing share of international mining operations as well as overseas institutions such as Grayscale Bitcoin Trust increasing their Bitcoin and Ether long positions: "In the near future, there could be an increasingly fragmented and distributed market globally."

In search of alternative conditions for placing their mining capacities, Chinese miners are now considering even drastic measures such as moving operations to other countries such as Kazakhstan or Russia.

In response to the closure of coal plants, Chinese miners have started connecting to hydroelectric power plants, moving to colder regions at the end of the rainy season, and coping with rises in electricity costs by using cheaper equipment.