If China is so bad for miners, why aren't they moving?

[kryptqnick]

China hasn't been exactly crypto-friendly, sending mixed signals for years. But recently, it has been quite straightforward and not friendly towards crypto miners. It started with Inner Mongolia's mining restrictions, but is now spreading to other regions, such as Sichuan.
Nevertheless, it seems that mining is still done predominantly in China. Why is that so?
The first thing that always comes up as an answer is cheap electricity, but is it that cheap and a good enough reason to do business in a country with an authoritarian regime and hostile attitude towards Bitcoin? The electricity rate in China is certainly lower than in most of the EU, but there seem to be tons of countries with even lower electricity rates, some of which seem like viable options for mining farms (Ukraine, Georgia, Turkey etc.). So why is China still the #1 country for miners if there are other options and if China isn't that great?

[mk4]

It isn't that mining in China suddenly isn't "great", it's that the CCP is outlawing mining. And the reason why there are still miners operating in China, apparently it's because even though a huge percentage already shut down and started moving, it's a gradual process, not something that happens in a snap of a finger.

Also, I've heard that smaller miners in China are managing to stay under the radar. (obviously due to far lower energy use compared to the goliaths)

[NotFuzzyWarm]

The first thing that always comes up as an answer is cheap electricity, but is it that cheap and a good enough reason to do business in a country with an authoritarian regime and hostile attitude towards Bitcoin?

Yes, that *was* the 1st answer. The 2nd is that the people creating and running the mining operations in China are <drum roll please> Chinese, which of course made it a natural choice to base their operations there.

Up until recent events, China had been more or less rather friendly towards crypto mining. The crackdowns in earlier years were all aimed at getting rid of scammers involved in the rampant flood of ICO/Token crapcoin pump & dump schemes.

[passwordnow]

It's not easy for them to just stop their operations because some of the places have been stopped by the government. They're probably are waiting for them to get a flag until they move. They also might have their plan Bs already if ever they're the next to be stopped by the CCP.
As long as they're not yet flagged down, there's no reason for them to move and shipping to other places or likely another country, they don't like it and it needs a lot of effort to do.

[Gamerholic]

Give it time and everything will definitely happen. It is clear that transferring a large farm is not as easy and fast as it might seem. The main thing is to understand exactly where you want to move and where you can be sure that this new place will not have the same problems as they received in China. If there are guarantees, clear rules - and there are, of course, such places, then everything will soon be restored, and China will lose its dominant position in production.

[NotFuzzyWarm]

Also one must note that the ban on mining does NOT include a ban on making miners. Bitmain, Canaan et al are still free to keep on making the hardware for sale to the rest of the world. The hardware just cannot be sold for use in China.

 As for the large mining farms which were mostly based in China, they just have to move the hardware end of operations out of the country. As I said earlier, they also will now have to use exchanges and banks that are based in other countries to reap their rewards.

[Coyster]

The first thing that always comes up as an answer is cheap electricity, but is it that cheap and a good enough reason to do business in a country with an authoritarian regime and hostile attitude towards Bitcoin? The electricity rate in China is certainly lower than in most of the EU, but there seem to be tons of countries with even lower electricity rates, some of which seem like viable options for mining farms (Ukraine, Georgia, Turkey etc.). So why is China still the #1 country for miners if there are other options and if China isn't that great?

Prior to the ban, you could say the number of miners in China was high for one reason such as cheap electricity, but that's not the reason why mining is still done in China in a large scale. After having established any business, it becomes difficult to change location immediately, and that's also applicable to the mining industry, you do not just expect those miners to change their locations so easily, it'd take quite a lot of logistics, that'll by extension take some time.

And having said that, the miners could also be closely monitoring the situation, maybe to see if the Chinese government would change it's stand on their decision regarding mining in China.

[Nhazwrath]

Bitmain just announced that they're halting sales.

[zasad@]

It seems to me that the data has not been updated yet, because the problem arose recently
I saw a link to this article
BIT Mining Successfully Delivers Mining Machines to Kazakhstan
https://ir.btc.com/2021-06-21-BIT-Mining-Successfully-Delivers-Mining-Machines-to-Kazakhstan
Any move to another country will incur transportation costs and taxes on the import of equipment.

[stompix]

The first thing that always comes up as an answer is cheap electricity, but is it that cheap and a good enough reason to do business in a country with an authoritarian regime and hostile attitude towards Bitcoin? The electricity rate in China is certainly lower than in most of the EU, but there seem to be tons of countries with even lower electricity rates, some of which seem like viable options for mining farms (Ukraine, Georgia, Turkey etc.).

The first mistake is to look at that table that gets really really annoying and talk about national electric price averages!
There is no such thing as the electricity price in the US, nobody (well maybe some random 1%) pays the average, once you break down states is like this:
https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a
Then you go one step further and look at prices per county. Then one more step and grab a nice deal within that county, better than the average there!

Do you think miners in China were mining at 10c/kWh? No way in hell!

Second thing is that as NotFuzzyWarm said, they are Chinese, you obviously want to run your business in your own country not seek residency and permit, and all the other stuff in some foreign country with all their laws.

And third, regulations! It's one thing to run a mining farm in China, where you can do your own wiring and not care about inspections, and a different thing to try this shit in the EU. By the time you finish with the paperwork you two more halving have occurred and Bitmain is already at S61 with the gear. And all this paperwork costs money, money, and time which are essential.

Mining farms have not moved away previously because there was no incentive to move, if someone would have offered them no regulations, zero tax, 1cent/kwh unlimited power, and free citizenship they would have moved a long time ago, but that was not the case! Bitmain tried to expand its business in the US with multiple projects, it wasn't that easy as they probably imagined!

[dothebeats]

You cannot expect huge miners to move out of the country in an instant and try to use their gear almost immediately. There are a lot of things involved in moving from point A, where you initially established your facilities, platform, etc., to point B, where you need to secure licenses, permit to operate and all that laborious process involved in hosting, running, and managing a warehouse that is potentially dangerous if not all safety requirements were met. There's just a ton of hassle and hurdles that a mining operator will face if they are forced to move due to regulations and the bans that it's more logical to sell the equipment rather than start over again.

[pixie85]

And third, regulations! It's one thing to run a mining farm in China, where you can do your own wiring and not care about inspections, and a different thing to try this shit in the EU. By the time you finish with the paperwork you two more halving have occurred and Bitmain is already at S61 with the gear. And all this paperwork costs money, money, and time which are essential.

And on top of that you need someone who knows local laws and speaks local language well enough to understand technicalities. Probably half of the citizens of every EU country have no idea of the laws and requirements to start a business and wouldn't know what permits are for what and which of them have to be filed where and at what deadline.
Starting a business abroad is hard even if you speak English, which is supposed to be the universal language.

[ranochigo]

Miners are concentrated in regions which would net them the most profits, factors are but not limited to: cost of labour, electrical costs, cost of landspace, cost of shipping and setting up the ASICs. Higher energy surplus, vast availability of land space, etc. It isn't hard to see why China is such a great place.

They haven't really done anything to the miners until quite recently. Even then the crackdowns were justified to be for the environment and not against Bitcoin.

[TimeTeller]

You cannot expect huge miners to move out of the country in an instant and try to use their gear almost immediately. There are a lot of things involved in moving from point A, where you initially established your facilities, platform, etc., to point B, where you need to secure licenses, permit to operate and all that laborious process involved in hosting, running, and managing a warehouse that is potentially dangerous if not all safety requirements were met. There's just a ton of hassle and hurdles that a mining operator will face if they are forced to move due to regulations and the bans that it's more logical to sell the equipment rather than start over again.

And right now, I believe those big miners in China are making a deal or arrangement to its government.
We don't know their internal communication regarding bitcoin mining, but if their government is really hard on them, I guess, they have stopped a long time ago.
But if they are still in business, it means, they found a way how to get around their government regulations.
And yes, it is not easy to move to another country, as there are other factors to consider like their citizenship, permits, transpo and others.

[just_Alice]

Up to a point everything was fine with mining in China, that's why people went for it, no one expected (at least in the nearest future) these actions from the government. In addition, I don't think that many people intentionally moved to China to mine, that wouldn't make much sense when you can simply join the pool from wherever you want.

So I'm guessing most of these people are Chinese, they have families, maybe steady jobs, a certain way of life, they mined in China because it was comparatively easy, so I don't think they would move someplace else just for the purpose of mining.

Right now, as push comes to shove some miners will move, but it will take time.

Turkey doesn't seem like a particularly good plan, considering that just recently the central bank in Turkey banned the use of crypto, they have a certain opposition against crypto in the government too, who knows what will be next.  

[Tristan Bieber]

I have seen news reports that some mines seem to be relocating, but I think most miners are actually reluctant to leave, because relocation of mines requires a lot of money and manpower. China has issued a ban to not allow mining, but it may not rule out that they will be in China. Under the supervision and control of the Communist Party, some mines belonging to the government are reserved for their use.

[NotFuzzyWarm]

Bitmain just announced that they're halting sales.

Source?
Nothing about it on the official Bitmain news site.

[bbc.reporter]

What might be more confusing is what is there to gain for China if they ban cryptocoin mining? It is making them have less control over the cryptocoin mining industry. I speculate these strict policies are temporary.

[dansus021]

are u guys aren't tired with this 

because news from china bitcoin its like money from monopoly game   


but i heard that miner from china is moving to texas https://www.cnbc.com/2021/06/17/chinese-crackdown-leads-bitcoin-miners-to-texas-and-florida.html

[TangentC]

Bitmain just announced that they're halting sales.

Source?
Nothing about it on the official Bitmain news site.

https://www.nasdaq.com/articles/chinese-crackdown%3A-bitmain-stops-rig-sales-exodus-ensues-hash-rate-declines-2021-06-23

Bitmain Technologies, the world's largest manufacturer of bitcoin mining rigs, is halting global spot sales of its machines to aid the secondhand market for rigs in China, according to Bloomberg.

By halting sales, Bitmain claims it can help miners targeted by Chinese authorities to get better prices for their machines when exiting the industry. And in the long run, the mining rig maker giant could also benefit if the reduced supply ends up triggering a price increase for new rigs.

Translation: Bitmain secretly owned the majority of those rigs that were shut down and now need to sell them.    IMO.