Bitcoin Miners Diversifying from China to the US over Regulatory Concerns
Bitcoin miners in China are increasingly looking for diversification out of the country because of the anticipated crypto mining ban, the Chinese government’s thoughtful position regarding cryptocurrency, and the increasing pressure from the ongoing trade war with the US.
Canadian-based blockchain firm Squire Mining, a leading miner in the world in terms of hashpower, has signed a letter of intent seeking to host more than 41,000 Bitcoin ASICs in the US. This move is part of an agreement with Kevin Turner-led Core Scientific, which is a blockchain and AI company.
Already, Squire has committed about $6.37 million to the deal to host prepayments while Core Scientific plans to spend at least $12 million in development of infrastructure to cater for the relocated equipment. The Canadian Bitcoin mining firm has close ties with the creators of Bitcoin SV Jimmy Nguyen and Craig Wright, who are currently Chain executives and they also double as advisors to Squire Mining.
This is seen as an indication of a significant change in the PoW ecosystem. Squire’s move is a benefit for the decentralization of Bitcoin Cash, Bitcoin, as well as Bitcoin SV networks. Research in the past has pointed out that more than 70% of crypto mining is located in China with multiple sources indicating that most of the mining happens in the Guangdong province. This is a major concern because the concentration of hashpower in one region increases the vulnerability of manipulation, censorship, and even seizure by government authorities.
The largest bitcoin mining firms, as well as ASIC designers, are considering hedging their operations from China and moving their supply chains away to other countries to reduce the effect of regulations from authorities in China.
Core Scientific CTO stated that the firm could compete with Bitcoin mining firms in China. Although the costs are higher because ASICs are developed in China, they nonetheless enjoy regulatory protection in the US.
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