Chinese bitcoin miner exodus faces hurdles as equipment remains stuck from shipment delays, tariffs and legal quagmire
- As many as 2 million cryptocurrency mining machines are stuck in China’s Sichuan province, lawyers estimate, after a government crackdown halted operations
- Miners trying to move to North America are losing millions of dollars while waiting to export machines through complex shipping routes to avoid tariffs
A massive exodus of bitcoin mining equipment from China is facing hurdles as millions of machines remain stuck over complex relocation procedures, according to lawyers handling such cases.
Compounding their troubles is the fact that miners are losing potential revenue each day the machines are offline, to the tune of about 170 yuan (US$26.70) in profit per machine by one estimate. For the largest operations, this means a loss of millions of dollars that can never be recuperated.
One lawyer representing a mining farm owner who once ran hundreds of thousands of machines told the South China Morning Post that his client is under a lot of pressure to get the machines up and running again outside of China. There were at least 2 million mining machines stuck in China’s southwestern Sichuan province by the end of 2021, by his estimate.
Mining farms used to enjoy local government support in Sichuan, where abundant hydropower made it cheap to run such energy-intensive operations. Each mining machine, usually weighing more than 15kg, uses multiple chips to solve complex mathematical problems and process massive amounts of data. This means cheap electricity is critical to eking out a profit. But now a new type of lucrative business has cropped up in the province: logistics and legal services that help miners relocate.
Since the national government made cryptocurrency mining illegal, large mining farms have been left with no option but to relocate. It is nearly impossible to find buyers for all their equipment. While smaller projects may sell what they can and buy new equipment abroad, big operations have found their search for a new destination to be tricky.
The ideal mining locations in China had cheap electricity provided by natural gas or hydropower. The combination of affordable power and an amiable local government has been difficult to find overseas. Russia and Kazakhstan were initially popular options, but they have proven risky locations because of power shortages and inconsistent policies.