In a survey of bitcoin miners in China, 74% say their ability to pay their electricity costs have been greatly affected by the Chinese government’s nationwide crackdown on telecom fraud and related money laundering activity.
While bitcoin miners in China obviously earn their revenue in bitcoin, they need to pay their electricity costs in Chinese yuan. Turning bitcoin into Chinese yuan has proven difficult in a country where the exchange between bitcoin and fiat currency is heavily restricted.
According to Wu, this situation will further accelerate the migration of bitcoin miners out of China and into alternative hubs of mining activity such as Kazakhstan and the United States.
In the past, various estimates on the geographic distribution of bitcoin mining have pointed to heavy centralization in China. However, the Cambridge Centre for Alternative Finance observed a decline from roughly 75% dominance to around 65% for bitcoin mining in China earlier this year. Some bitcoin miners have pointed to regulatory uncertainty as a key reason for moving away from the Chinese market.
Kyle is the creator of The Crypto Feed. Before founding The Crypto Feed, Kyle was a longtime freelance Bitcoin writer at places like Forbes and Bitcoin Magazine.