China’s crackdown on crypto mining could possibly create an environment so competitive, that only the biggest miners could survive, said co-founder and managing partner at Waterdrip Capital.
Yusan Zheng said during a discussion that “Capital and network resources are required in order to find suitable sites that are outside the mining hubs”. He also noted that only those (miners) who have the most experience will be able to carry out this plan.
If the mining power becomes centralised, miners could control the supply of bitcoin, and manipulate the market.
Miners are to be move from western China’s hubs to the east, where they will have the opportunity to place mining machines into factories, Zheng said. Mining firms in China have also been trying to find other hosting sites, overseas, since the crackdown.
Mining hubs in Kazakhstan and Russia have little capacity and will not be able to support these new mining machines. The ones in North America are now expanding operations, but there is one problem; it will take a longer time to reach the sufficient capacity to host mining machines, said Ethan Vera, COO at Luxor.
She also added that it is not possible to move all the Chinese mining machines abroad and that miners will have to figure out another way to keep the machines running.