Chinese Bitcoin Miners’ Southward Migration for Affordable Hydropower After Halving 2020
Almost all thermal-powered crypto mining farms in north China’s Inner Mongolia and Xinjiang province have been shut down, while 20% – 35% of hydropower-powered crypto mining farms are vacant in north China’s Yunnan, Guizhou, Sichuan province.
The electricity charge is one of the biggest expenditures of bitcoin miners, and the price of electricity directly determines the revenue of mining machines. For cheaper electricity charges, Chinese crypto miners often travel long distances or even take risks.
Bitcoin block rewards were halved from 12.5 bitcoin to 6.25 on May 12. From then on, cheap electricity prices become so important as some Chinese miners are willing to travel to Iran for the “1 cent” electricity, others even challenge the law for free electricity, while most miners choose to relocate the mining machine from north China to south China for cheaper hydropower.
At the miner summit which will last for a week in Sichuan, most bitcoin miners outside the conference venue were complaining about the poor market conditions and the difficulty in mining.
According to some miners, bitcoin mining farms in Sichuan are not saturated and in dire need of mining rigs. On the other side, small miners are making no money from mining.
Now, most of the miners are still migrating on the road from North China to South China. It takes 10-17 days for a miner to shut down the machines in a thermal-powered mining farm and restart in a hydropower-powered farm.
The annual rainy season has begun. In the middle and last ten days of May every year, it is the time when hydropower plants across Sichuan open their gates and release water, and it is also the season when miners and mining machines migrate.
In Inner Mongolia and Xinjiang province, the price of electricity is often 0.35 Chinese yuan / kWh, which can be reduced to less than 0.2 Chinese yuan / kWh in Yunnan, Guizhou and Sichuan province.
“But this year’s is not the same as before. Many mining farm owners who have signed annual contracts with thermal power plants choose to default. M21 runs with thermal power produces a profit of 5 Chinese yuan per day, while produces a profit of 15 Chinese yuan per day with hydropower.”
Said Yang Haolin, Chinese miner, now almost all thermal- powered mining farms in Inner Mongolia and Xinjiang have been shut down and moved southward.
20% – 35% of hydropower-powered crypto mining farms are vacant in north China’s Yunnan, Guizhou, Sichuan province. The surplus mining farms are the failure that the owners have wagered against the halving price of bitcoin – they think that the price of bitcoin after halving will reach $20000.
On the other hand, to avoid wasting the machine seats, the mining farm owners have to find machines that can barely make profits to fill the farms.