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Bitcoin Miners Booted By China, Texas Likely Destination

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As China continues to move against local cryptocurrency operations, bitcoin miners are working out their exodus plans.

Among the preferred destinations in Texas, which miners see have several advantages conducive to resuming their mining operations.    

RELATED: Understanding Bitcoin & Blockchain in 10 Minutes

China Cracks Down On Bitcoin Miners

As early as 2017, China already banned the trading of cryptocurrencies. However, they remain tolerant of bitcoin mining. This is the process by which individual computers try to solve complex algorithmic problems.

A successful solving of the problem gives the user Bitcoins as a reward. However, mining for bitcoins requires a lot of computing power. This is where the Chinese government’s patience began wearing thin.

Estimates place China as hosting around 70% of the world’s bitcoin miners. These miners cluster around four provinces: Xinjiang, Inner Mongolia, Sichuan, and Yunnan. Coal-fired plants service Xinjiang and Inner Mongolia’s energy requirements. Meanwhile, Sichuan and Yunnan are dependent on hydropower. 

Once China realized it cannot fulfill its climate targets, province leaders blamed bitcoin miners for the surge in electricity consumption. Last May, the government called for sweeping measures against bitcoin mining and trading.

Last month, China’s State Council pledged to crack down on Bitcoin mining. The first province to implement stricter measures was Inner Mongolia. It banned Bitcoin mining and related activities last month.

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Meanwhile, Xinjiang province authorities gave notice to bitcoin miners clustered in an industrial hub to shut down immediately. 

The Great Mining Migration

China’s crackdown set off what crypto circles termed “the great mining migration” as bitcoin miners scramble to transfer operations to a more conducive location.

Texas became a new destination for consideration. Despite its recent issues with blackouts and power price hikes, Texas is home to some of the world’s lowest energy prices. 

In addition, the state’s share of renewable energy sources continues to grow over time. Currently, wind power is contributing 20% of Texas’s total power supply.

Its deregulated power grid means that customers can choose which power provider to hook up with. On top of it all, many state officials are very crypto-friendly.   

What Happens To Bitcoin?

Many financial analysts do not see the Chinese expulsion of bitcoin miners affecting bitcoin prices. The bitcoin mining system is not heavily dependent on location.

As long as steady power and internet connection are available, they can operate anywhere in the world. Already, some Chinese miners have explored new locations in Central Asia, such as Kazakhstan and Afghanistan. 

In fact, Bitcoin rallied over the weekend to close at over $40,000. This is its highest price since its May collapse. China’s purge of bitcoin miners had nothing to do with the change in prices. Instead, an Elon Musk tweet apparently fueled the rally.

Watch the WSJ’s video special on the US vs China: The Battle for Bitcoin Mining Supremacy:

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Will you welcome bitcoin mining operations in Texas? Won’t mining farms affect the price of energy in the state?

Let us know what you think about the movement of bitcoin miners. Share your comments in the comments section below.

4 Comments

4 Comments

  • Jimmy R Young says:

    Bitcoin is here to stay. Better in US than overseas.

  • Anonymous says:

    Ban Bitcoin. Crypto currency devalues the Dollar.

  • C.L. Comfort says:

    Crypto devalues the dollar?’ Leftists devalue the dollar!

  • Alan Kopilec says:

    Wow, what a bunch of communist led bull crap. Am I really reading this? We should not follow China or this current U.S. administration straight to hell.

    All this crap started with that experiment two decades ago where they were looking for people to join in and use part of their computer space while the evil geniuses figured out this algorithm stuff. They figured how to take pieces of large pies without anyone noticing.

    They now know how to confuse and misinform you and they even make you feel sorry for China and take the blame for China’s problems while moving operations to Texas? This is a scheme developed by evil people who took the time to learn it. They can rig lotteries, elections, and financial markets.

    Don’t be stupid America. We were never asleep. We are Awake.

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