When China decided to shut down miners in China, it was a massive hit for the more than 2.4 trillion USD industry, which collapsed overnight.
For many years, crypto investors have put a lot of effort into the profitable industry, especially in countries where the price of electricity is low. And China was mining heaven for years. When the People’s Republic of China announced its plan for combating the mainstream coins with a Digital Yuan, the world was shocked. A country known for restrictions was now entering the digital world, surpassing the US, Europe, Australia, and Canada. Low electricity bills, access to the most extensive electricity network in the world (China has the highest energy production globally, which is more than the US, India, and Russia altogether), and now – government backing.
In May 2021, however, Xi Jinping flipped the coin. A year back (May 2020), the share was almost 60%. Since the announcement was made, China didn’t consume any energy on crypto mining, and the percentage of the US rose twice.
The reason? Chinese crypto miners. As Shuyao Kong from ConsenSys says, “Fundamentally, Bitcoin is in a different paradigm from the Chinese political structure.”
Chinese crypto miners in Texas
Kevin Pan, CEO of one of the biggest crypto mining companies globally – Poolin, has told the BBC that staying in China was no longer an option. “We decided to move out, once and for all. We are never coming back again,” were his words. Based in Hong Kong, Poolin was the second-largest mining network in the world. However, with China no longer operating on the crypto map, Bitcoin miners moved everything abroad. Some of them went to neighboring countries such as Russia and Kazakhstan, where they can be quick to resume their operations.
But unlike small crypto miners who could move their equipment to neighboring countries, the industry leaders sought something different from cheap electricity. They were looking for government backing – a safe haven for their valuable assets. When the governor of Texas tweeted, “Cryptocurrency wins votes of confidence from Gov. Abbott & Texas Department of Banking. Texas is open for Crypto business,” the green light was given. State Representative Tan Parker wrote a bill to give banks access to cryptocurrencies so that people can buy Dogecoin, Ethereum, Bitcoin, and other cryptos without an issue.
Chinese powerhouses in the industry – like BiT Mining, have planned to invest $26bn and above in Texas, while the Beijing company Bitmain will expand its facility in Rockdale.
Texas – the center of capitalism
It has always been fascinating to understand Texans. Their romantic optimism and the constant fight for more freedoms make the state probably the most capitalistic one in the US. The state has a business environment that cannot be seen anywhere else. It is no coincidence that a state priding itself with its freedoms attracts similar-minded crypto entrepreneurs.
As the VP of Poolin Alejandro de la Torre says, “Everyone here is a capitalist, and everyone wants Bitcoin to succeed.”
Low energy bills
After all, the crypto mining industry is consuming a lot of energy. Chinese miners are all but negligible. They want to secure a place where they can actually be profitable. And Texas is one of the best places known for low electricity bills. For many, it’s surprising that you can pay less for utility bills in the US than in Europe or some other countries, but there are several reasons why Bitcoin mining is profitable in Texas.
First off, the state has a growing percentage of renewable energy. In 2019, wind-generated power had a 20% share of the whole electricity network. The share of nuclear energy was 10.8%. The good thing is the power consumption has only a couple of peaks where prices hike. At other times, below-average consumption makes buying electricity to “feed” the machines extremely cheap, making a lot of sense.
Best case scenario
In order to keep the environment clean, world governments take measures and make restrictions on crypto mining. While energy consumption is still a major concern for the whole blockchain industry, Texas has provided Chinese miners an opportunity to gain profits without hurting the environment. The circumstances can get better if Washington State allows Chinese crypto miners to settle in there. Its hydroelectric power facility Grand Coulee has a 6480 MW capacity which is more than the second and third facilities combined. But for the time being, Texas is one of the very few sites where Chinese crypto investors could trust when settling in.
Sources used:
https://www.bbc.com/
https://www.cnbc.com/
https://ift.tt/2lkgcOT
https://ift.tt/3gR7lOo
https://ift.tt/340rIrj
Do you have a news tip? Call us at (661) 298-1220, or send an email to newstip@hometownstation.com. Don’t miss a thing. Get breaking KHTS Santa Clarita News Alerts delivered right to your inbox. Report a typo or error, email Corrections@hometownstation.com
KHTS FM 98.1 and AM 1220 is Santa Clarita’s only local radio station. KHTS mixes in a combination of news, traffic, sports, and features along with your favorite adult contemporary hits. Santa Clarita news and features are delivered throughout the day over our airwaves, on our website and through a variety of social media platforms. Our KHTS national award-winning daily news briefs are now read daily by 34,000+ residents. A vibrant member of the Santa Clarita community, the KHTS broadcast signal reaches all of the Santa Clarita Valley and parts of the high desert communities located in the Antelope Valley. The station streams its talk shows over the web, reaching a potentially worldwide audience. Follow @KHTSRadio on Facebook, Twitter, and Instagram.
No comments:
Post a Comment