Bitcoin Halving Drives Exodus of Former US Miners Abroad

(Bloomberg) — About 6,000 old Bitcoin mining machines in the United States will soon be idled and sent to a warehouse in Colorado Springs where they will be refreshed and resold to foreign buyers looking to profit from mining in lower cost environments.

Most read on Bloomberg

Wholesaler SunnySide Digital operates the 35,000 square foot facility and receives equipment from a mining customer. The outdated machines are among hundreds of thousands it expects to receive and refurbish during a major quadrennial update to the Bitcoin blockchain.

Known as the halving, the late April event will significantly reduce the reward that is the main source of income for miners, who will attempt to reduce the impact by upgrading to the latest and most efficient technology. With electricity being the largest expense, mining companies, including publicly traded giants Marathon Digital Holdings Inc. and Riot Platforms Inc., must reduce their usage costs to maintain a positive margin. Their older computers may still turn a profit, but this is unlikely in the United States.

It's a natural migration with buyers of old machines operating in parts of the world where electricity is cheapest, said Taras Kulyk, CEO of SunnySide Digital, which has resold American computers to miners in countries like Ethiopia, Tanzania, Paraguay and Uruguay. This is accelerated by the halving.

Some 600,000 S19 series computers, which make up the majority of machines currently in use, are leaving the United States primarily to Africa and South America, according to an estimate by Ethan Vera, chief operating officer of crypto services -mining and logistics provider Luxor. Technology in Seattle.

In Bitcoin mining, specialized machines are used to validate transactions on the blockchain and earn operators a fixed reward in tokens. Anonymous Bitcoin creator Satoshi Nakamoto halved every four years to maintain the hard cap of 21 million tokens. Next month's event is the fourth since 2012 and the reward will increase from 6.25 Bitcoin to 3.125 now.

The story continues

Read more: What is Bitcoin Halving? Does this drive up the price? :QuickTake

Bitcoin has surged about 50% this year to around $63,500, although it is down from a record high of $73,798 reached on March 14. Bringing more efficient machines online has become more urgent with the halving just weeks away, as continued use of older equipment could mean electricity costs will be close to or higher than mining revenues.

Although the S19 series and similar models may not be profitable in the United States after the halving, they can still generate decent profits and have an extended lifespan if hosted in certain regions of Africa, said Jaran Mellerud, CEO of Dubai-based Hashlabs Mining. rents data center space in Ethiopia and provides hosting services to Bitcoin miners.

Price drop

Some buyers wait until after the event to buy older computers, assuming their prices will drop even further, said Lauren Lin, Luxors' director of business development. Used S19 models cost around $7,030 as of March 2022, according to Luxor, which operates a used machinery trading desk. The price fell dramatically a year later, to around $900 when Bitcoin prices fell, then to around $427 this month and is expected to sell at around $356 in May, after the halving.

Some miners in the United States are choosing not to sell their hardware and moving the equipment to regions with lower electricity costs and third-party data centers. Nuo Xu, who has two locations in Texas, is traveling this month to Ethiopia, Nigeria and a few other countries to determine the locations of about 6,000 older computers.

There are more risks for my machines in Africa but I have to move them there, he says. Cheaper electricity outside the United States means it will take much less time to recover overhead costs, with labor and construction materials also much cheaper, he said.

Accommodation costs

Miners around the world who do not have their own facilities pay hosting fees, which typically include electricity, labor and third-party operators. In Xu's experience, charges in the United States are about 7 cents per kilowatt hour. In Ethiopia, which has eased regulations on cryptocurrency mining and increased its electricity production, the rate is around 5 cents, according to Hashlabs Mellerud. This difference of two cents is huge for miners.

Electricity itself costs around 3 cents per kWh in Ethiopia, according to Hiwot Eshetu, director of marketing and business development at Ethiopian Electric Power. In the United States, the range is about 3 to 6 cents, according to Luxor estimates.

Ethiopia is becoming a major player in the digital mining ecosystem, said SunnySides Kulyk, who added that his company was negotiating a deal to help move between 20,000 and 40,000 rigs to the country from East Africa.

Read more: Chinese Bitcoin miners find new crypto haven in Ethiopia

Not all U.S.-based equipment leaves the country. This process can be more difficult for publicly traded companies because they must account for risk-averse shareholders. There is also some hesitancy to relocate machines overseas due to transportation costs, breakage and safety concerns.

Publicly traded Bit Digital Inc., one of the largest Bitcoin miners, has older generations of computers lying dormant in a warehouse in Houston.

These machines collect dust from time to time, CEO Sam Tabar said. But the New York-based company keeps them because when Bitcoin prices are high, computers can be taken out of retirement and still make a profit, he said.

A lot of money

Miners have been preparing for the halving for years and are spending a lot of money to replace their old hardware. The top 13 public Bitcoin mining companies, including Riot Platforms and CleanSpark Inc., have placed orders for machines worth more than $1 billion since February 2023, according to crypto mining researcher TheMinerMag.

Five of the largest mining companies raised more than $2.7 billion by selling their shares in the two years ended in December. Since the start of this year, these same miners have earned an additional $840 million, according to the researcher.

Most read from Bloomberg Businessweek

2024 Bloomberg LP

Sources 1/ https://Google.com/ 2/ https://finance.yahoo.com/news/bitcoin-halving-spurs-exodus-old-133000511.html The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos