The diaspora of Bitcoin mining centers from the People’s Republic of China has already been reported numerous times. Likewise, in different media the various calls of some regional politicians in the United States to attract these miners are pointed out. However, are Texas, Florida and other entities in that country the best places for Chinese miners to settle?
Although the United States is not the only or the most profitable of destinations for Chinese farms, it is surely the most stable. The latter is a great advantage for the tranquility of the entrepreneurs of this business. These were tormented for years by the bipolarity of the Beijing authorities regarding Bitcoin and cryptocurrencies. In political and economic terms, the North American nation seems to be the best destination.
Despite this, there are negative aspects in that country, which are offset by more favorable situations elsewhere. Either way, it can be said that the perfect place to mine does not exist. It all depends on the adaptability of the miners. Other destinations for these Chinese entrepreneurs are Latin America, Europe and Central Asia.
What do Chinese Bitcoin mining centers expect when evaluating their possible destinations?
There are a large number of factors that the owners of large Chinese Bitcoin mining centers evaluate when migrating. The first of them is stability. Leaving a country with a toxic environment for your business to settle in a similar one does not seem like a very appropriate decision. In that sense, the United States is the center of attention.
However, that country has its weaknesses and the Chinese miners evaluate other aspects besides stability. For example, profitability, on which factors such as the value of labor for maintenance or service or taxes and fees depend. In the North American nation, taxes vary depending on the state.
Taking these last elements into account, the appeal of the United States becomes a bit blurred. The measures of the so-called trade war against China initiated by Donald Trump remain in force. Thus, introducing technological equipment to the United States can be costly. Imports face tariffs of 25%.
In parallel, taxes vary between 10% and 37% depending on the state in question, explains CoinDesk. The labor for the repair of equipment, which breaks down very frequently, also becomes expensive. For all this, China’s Bitcoin mining centers think twice.
Central Asia, the Middle East and Europe
Another of the negative factors of the United States is the remoteness. The arrival of the equipment can take from one to two months by ship, while to countries near China, at most, it takes two weeks. It is in this scenario that the nations of Central Asia, the Middle East and Europe enter the scene.
This broad territorial range includes Russia, Kazakhstan and Georgia, among others. The conditions in these countries allow energy to be as cheap as in Texas, for example. But the labor is cheaper, the safety standards more relaxed. At the same time, fees and taxes vary, but are generally low.
According to Luxor CEO Nick Hansen, of all the hashrate moved by China, 35% would nest in that area, which includes the European Union. Another 25% would go to North America, including Canada. Meanwhile, 15% would go to Latin American countries.
The same thing that must be said of the countries in the area is that stability varies depending on the location. In other words, the more these Bitcoin mining hubs move further west, the more stability they will achieve.
Possible destinations in Latin America
Although the Latin American subcontinent is not a favorite place for international investors, it does have some attractions, at least for miners. Political turbulence, economic instability, and internal inter-institutional rivalries are acute issues.
However, these problems can be balanced by abundant hydroelectric resources, which guarantee low electricity costs. Among these nations, Venezuela, Paraguay and El Salvador stand out.
The first of these countries is the one with the clearest and longest-standing regulation for Bitcoin mining. The acute crisis that Venezuela has been experiencing for years has left an industrial vacuum that increases the already disproportionate excess energy reserves. It should be remembered that the Guri dam is one of the largest in the world in generation capacity (10 GW).
As paradoxical as it may seem, of the 24 Venezuelan states, almost all suffer daily power cuts of 2 to 6 hours for reasons of rationing. On the other hand, El Salvador, becomes another of the friendly destinations for Bitcoin mining, although its internal instability does not leave it very well stopped.
Paraguay is another of the countries with the largest reserves, as it shares with Brazil one of the most enormous dams, Itaipu. So far, a bill is expected to be approved in parliament to provide a legal framework for the mining business.