Chinese miners seek to leave a country with a toxic environment for their business to settle in one offering them stability. The arrival of equipment in Central Asia, the Middle East and Europe may take less time than in the United States.
There has recently been a diaspora of Bitcoin mining centers from the People’s Republic of China. Besides, different media report various calls from some regional politicians in the United States seeking to attract those miners.
The North American country is not only profitable for Chinese Bitcoin mining farms but also offers them stability. That is a considerable advantage for the entrepreneurs in this business, who the Beijing authorities have tormented for years. Concerning political and economic factors, the United States seems to be the best destination.
However, more favorable situations in other places outweigh the negative aspects of that country. It seems that the perfect place to mine Bitcoin does not exist and that everything depends on the adaptability of miners. Other destinations for these Chinese entrepreneurs are Latin America, Europe, and Central Asia.
What Chinese Bitcoin Mining Centers Expect When Assessing Possible Destinations
At the time of migrating, big Chinese Bitcoin mining centers evaluate a large number of factors. Leaving a country with a toxic environment for their business to settle in a similar one does not seem appropriate. For that reason, the United States is the center of attention because it offers them stability.
Chinese miners evaluate other aspects apart from stability as the country has its weaknesses. For example, factors such as the value of labor for maintenance or service or taxes and fees depend on profitability. In the North American country, taxes vary between 10% and 37%, depending on the state.
These latter elements make the attractiveness of the United States a bit blurry. Additionally, introducing technological equipment to the United States can be costly as imports face rates of 25%.
Central Asia, the Middle East and Europe as Destinations for Chinese Bitcoin Mining
The arrival of the equipment in the United States can take from one to two months by ship, while it takes two weeks in countries near China. In this context, Central Asia, the Middle East and Europe come into play as destinations for Chinese Bitcoin miners.
The conditions in countries like Russia, Kazakhstan and Georgia, among others, allow energy to be as cheap as in Texas. However, labor is cheaper while security standards are more relaxed. Although fees and taxes vary, they are generally lower.
The CEO of Luxor, Nick Hansen, considers that 35% of the hash rate that China moves would arrive in that area, including the European Union. Another 25% would go to North America, which includes Canada. Meanwhile, Latin American countries would be the destination for 15% of them.
The Possible Destinations for Bitcoin Miners in Latin America
Although Latin America is not a favorite place for international investors, it does have some attractions for miners. Some critical issues are political turmoil, economic instability, and internal inter-institutional rivalries.
However, abundant hydroelectric resources, which guarantee low electricity costs, can balance these problems. The most prominent of those nations are Venezuela, Paraguay, and El Salvador.
The first country has clear and long-standing regulations on Bitcoin mining. The acute crisis that Venezuela has been going through for years has left an industrial vacuum. This situation increases the country’s disproportionate excess energy reserves.
Another friendly destination for Bitcoin is El Salvador, although its internal instability does not put it in a good situation.
Since Paraguay shares one of the largest dams (Itaipu) with Brazil, it has one of the hugest energy reserves. However, Parliament has not yet approved a bill to provide a legal framework for the mining business.
By Alexander Salazar