The Great Migration in China’s Booming Crypto Mining Industry
The recent ban on Bitcoin mining in China has forced its entrepreneurs to flee to Texas. Companies like Poolin moved their headquarters in Hong Kong to Austin as the second-largest bitcoin mining system globally. Asia was home to most global bitcoin miners until the ban caused the price to climb rapidly and caught miners by surprise.
Some people are calling this move the great mining migration, and the Lone Star State seems to be the perfect place to be. Cryptocurrency mining is a very complex process. The two things bitcoin miners value the most are flexible regulatory environments and cheap electricity.
Bitcoin Mining Has A New Frontier
The CEO of Poolin, Kevin Pan, felt right at home in the Lone Star state when he was gifted an AR-15 rifle upon his arrival. One of the most vocal supporters for cryptocurrency in the state has been governor Greg Abbott. In June of this year, he tweeted that Texas would be the leader in crypto. That same month, they became the second state in America after Wyoming to validate cryptocurrency and blockchain into its commercial law. A firm based out of Shenzhen named Bit Mining plans to invest $26 million in the state to build a data center.
The Political And Energy Risk In China
Because mining Bitcoin is an energy-hungry industry, Austin was an easy choice to call home. The state has some of the lowest prices for energy in the world due to its power grids being deregulated. Miners still preferred the United States because the electrical infrastructure is well developed. Some analysts also warn that this migration could cause huge repercussions if cities cannot meet the massive need for energy by these mining farms. In February, a blackout caused by deadly snowstorms left more than 200 people Dead and millions of businesses and homes without power for multiple days. While there was no power, the state urged bitcoin farms to stay offline by fully compensating them.