Exodus of Bitcoin miners grows in the face of repression in China, some for El Salvador?

Key facts:
  • Kazakhstan’s cheap energy is seducing big miners in the industry.

  • El Salvador has volcanic, hydroelectric, solar and wind power.

Chinese Bitcoin (BTC) miners are moving their operations to other countries since China intensified its crackdown on the industry. Among them is equipment manufacturer ASIC Canaan, which has made the decision to diversify, and therefore now extracts the cryptocurrency in Kazakhstan, where it moved part of its operations.

Canaan announced in a statement that a fleet of its equipment is already operating in Kazakhstanwhich has abundant sources of energy. In fact, in 2018 the Central Asian country was ranked as the ninth largest coal producer in the world. The nation is also a major producer of other fossil fuels such as natural gas.

The country in northern China is attracting miners who have been forced to emigrate. They find Kazakhstan attractive because it produces more than twice its energy demand, allowing you to offer cheap electricity to mining farms who are looking for a place to settle.

Kazakhstan not only hosts a new Canaan data center, but the company BIT Mining, owner of the important pool mining BTC.com announced that it has already mobilized part of its teams to the transcontinental country, as reported by Crypto News.

Today, when Chinese mining companies are looking for new alternatives, Canaan sees its diversification as a” logical step ” in the company’s development. Not only to manufacture equipment, as had been maintained until now, but also to produce the computing power needed to mine bitcoins. The hash rate in the last month has dropped to 50% since the recent mining bans in several provinces of China.

Other mining companies are also leaving China, some are leaving Canton city, northeast of Hong Kong, to move your bitcoin mining equipment to Maryland, in United States, as reported a journalist on Twitter.

Kazakhstan is attractive to Bitcoin mining farms for how cheap electric power is in the country. Source: YouTube capture.

El Salvador and Argentina: Will they catch the attention of Bitcoin miners?

The hash rate Bitcoin had increased significantly in recent years, but with a notable concentration in China, a country that for years has been responsible for much of the computing power behind Bitcoin. Now it seems that everything is about to change.

When most miners would be looking for new places to settle, potential candidates such as Kazakhstan, which stands out for its proximity to China, have emerged. As well others emerge such as the United States and Canada that already have large mining farms.

However, El Salvador and Argentina also stand out as Latin countries with potential for Bitcoin mining. In fact, Canadian company Bitfarms Ltd., is moving forward with plans to build a gigantic Bitcoin mining center in Argentina, a project he has been working on since October last year.

Bitfarms signed an eight-year energy deal with a local private company that, for the first four years, will secure 210 megawatts of electricity at a price of 0.02 kilowatt hours. That shows that other deals with Chinese companies may be on the way dedicated to mining.

The same happens in El Salvador, where there is talk of a “plan to offer facilities for Bitcoin mining with very cheap energy, 100% clean, 100% renewable and with zero emissions, taking advantage of volcanic activity”, as noted by Salvadoran President Nayib Bukele.

The president of El Salvador is making available the geothermal energy that is generated in the country to mine Bitcoin. Source: Screenshot YouTube.

But, in addition to volcanic energy, El Salvador has other sources that can incentivize Bitcoin mining. The Central American country is building its fifth large hydroelectric plant, which would begin operations in 2022, with a generation capacity of 67 megawatts (MW), according to local media.

Besides, in that nation the largest wind farm in the region is built. “During a technical visit made by officials of the companies, it was explained that the largest wind farm in Central America, has 10 of its 15 wind turbines, in addition to being the highest in the region with 120 meters high, allow the injection of electricity into the national grid,” Forbes said in February.

On the other hand, in December of last year, the company AES El Salvador inaugurated Opico Power solar power plant, generating 5.2 MWp of sustainable energy. The same company previously installed the Moncagua solar plant, and developed another similar project called Bosphorus, which generates 100 MW of renewable energy through 10 solar plants. With such diversification of energy sources, El Salvador becomes a country with great potential for bitcoin mining.

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