Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Half of what was lost due to Chinaâs crackdown on Bitcoin mining will never go back online, Phoenix Storeâs CEO says.
Two weeks after a 15% increase in electricity prices in Turkey, a new store selling professional mining equipment has opened its doors in Istanbul â the business hub of the country â on Tuesday.
Opening a mining equipment shop in a country with costly electricity seems counterintuitive. But Phoenix Store, Bitmainâs sales partner in the Middle East, did the math before opening its second store within the region. Phoenix Store CEO Phil Harvey explained that the companyâs primary goal with the Istanbul store is to educate Turkeyâs crypto-friendly population about crypto mining. Then, customers can purchase mining equipment and hosting services that would operate in Canada, the United States or Russia. Mining in Turkey is simply unfeasible.
âItâs like you want to invest in gold mining,â he said, âYou can come here and invest in a gold mine, but itâs not going to be in the back garden. Itâs going to be outside.â
Cointelegraph Turkey sat down with Harvey after his presentation to learn more about the crypto mining landscape in the aftermath of Chinaâs crackdown on mining operations.
âChina needs to maintain its current growth for the projects in the country,â Harvey started, detailing the crackdown. The country is required to improve several areas, such as reducing its carbon footprint, to get funding from the International Monetary Fund or the World Bank:
âThe easiest industry to reduce overnight was a gray area industry. Some 68,000 gigawatts of power was removed instantly from China just by saying no to Bitcoin mining.â
Itâs a significant revenue stream, but even that would pale in comparison to how much the IMF or World Bank invest in China for projects like road initiatives. âSo it was an easy decision for China to make to remove these miners and reduce the carbon footprint that they have,â Harvey added.
While several miners announced that they would relocate to cold-climate countries like Canada, Harvey believes that half of whatâs lost due to Chinaâs crackdown will never go back online:
âBecause these are older machines that were in a warehouse for many, many years and were just making 5%â10%, and they were on. But it doesnât make commercial sense to now take those off and move them.â
Related: China crypto ban is a âhuge opportunity for Canada,â mining group head says
The value per machine might be $150â$200 at most, and it would take about the same amount of money per unit to relocate them. âIt doesnât make sense to do that,â he said, âThatâs why I say half of what was on the network that we lost.â
Harvey expects regions such as Russia and Kazakhstan to increase their share in the mining landscape with new machines added to the network, but he doesnât plan to open new stores in those countries for now. After Dubai and Istanbul, Phoenix only plans to open a store in London. âWe wonât expand any further for the stores outside of those three locations,â he said.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.