What’s Happening with Bitcoin Mining in China?

Bitcoin Miners in United States Warehouse

In late May, the Chinese government cracked down on crypto mining sending markets into a crash over the past month. The crackdown follows a series of policy announcements aimed at curbing crypto mining operations due to environmental concerns. However, the recent clampdown is nothing new but merely a reiteration of regulations proposed years ago. The Chinese central bank has been concerned with cryptocurrency’s growing popularity because it directly challenges the nation’s current financial stability. To protect the economy from the wild volatility of the crypto market, Beijing halted the facilitation of crypto payments from leading financial institutions in the country and doubled down on bitcoin mining regulations as well. This has set off what many are calling “the great mining migration.” The crypto mining exodus has already begun with new and used cryptocurreny miners flooding the market, and many believe the rigs will be relocated to North America. 

This is an end to an era for China, which has hosted 65% – 75% of the world’s hash rate. Due to its established technology, supply chain, and cheap electricity, parts of the country were ideal for large scale mining operations. Regions like inner Mongolia, Xinjiang, Sichuan, and parts of Yunnan were major hubs for mining rigs. Since the crackdown, province leaders have provided two months for miners to clear out. In addition, cryptocurrency prices have plummeted. Earlier in the year, Bitcoin peaked at $64k and is now sitting just under $36k. Though there are several variables responsible for the heavy decline, it would be difficult to deny China’s giant impact on the market. Despite China’s anchored stance on crypto, miners are looking to relocate to the United States and Canada. Texas is now a potential location for the miners in exodus from China because of its libertarian regulatory environment and abundant cheap green energy. In addition, Texas has the cheapest electricity in the United States. The exodus stresses the opportunity for miners to diversify their global hashrate. This migration provides the bridge for other countries to implement small crypto zones and further expose people to digital assets.  

Since the inception of the Bitcoin, studies have shown that there has been an astronomical surge in carbon emissions. This undermines President Xi Jinping’s promise to make China carbon neutral by 2060. Thanks to the heavy rain during China’s summer season, miners were able to rely on sustainable power sources to fuel the rigs. However, the arid winters caused miners to seek out an alternative cheap electricity source: coal. Burning coal to create currency has quickly become a huge factor for the mining exodus. In addition, many believe that the Chinese Communist Party is speculative and apprehensive toward anything outside of their control. The crackdown was a result of these factors. Now, some of the world’s largest mining farms are halting operations in China and migrating across the globe to set up shop in other countries. 

GMO Challenges Bitmain with the 33TH/s B3

GMO B3 ASIC Bitcoin Miner

At the beginning of 2017, Japan’s GMO Internet Group officially announced its entrance into the cryptocurrency world. In May of the same year, they opened a cryptocurrency exchange via Z.com. Just a few months later, they announced an intention to produce ASIC miners with a 7nm chip. Next, they launched an open source blockchain project (GMO Blockchain OSS) that began with the release of a blockchain-based system for sharing medical records. To cap off the year, and complete a cycle, GMO announced that they would allow employees to receive some of their pay in Bitcoin.

We believe the cryptocurrencies will develop into “new universal currencies” available for use by anyone from any country or region to freely exchange “value,” creating a “new borderless economic zone.

Introducing GMO’s B3: 33TH/s SHA-256 ASIC Miner

In June of this year, GMO unveiled Japans first-ever ASIC miner, which boasts the worlds first 7nm semiconductor chip. The GMO’s B2 went on pre-sale with a hashrate of 24TH/s and is scheduled to ship in October. Only a month later, they announced the sale of the B3. This new model is to achieve up to 33TH/s. That’s a 37.5% increase over their previous model, and more than doubles the productivity available anywhere else on the market. When operating at peak performance, these miners consume 3,417w per unit (103W per TH/s).

Besides the increased hashing capabilities, the B3 also gives their operators an option between an Automatic and Manual mode. These miners can automatically determine optimum performance efficiency according to the operating environment and global hash rate; this feature also protects miners from overheating. In manual mode, the B3’s operator can manually adjust the hashrate and power consumption, depending on their needs. As with the B2, these miners also can be “daisy-chain” connected with up to 32 units. That development means that you need only one internet port to hook up as many as 32 units. The B3 also supports online updates, and GMO provides an API allowing its owners to remotely monitor mining operations.

These units are shipping in November for the same price as the B2. Since the B2 is already sold out, they’re allowing its customers to upgrade for free!

Buy GMO Miner B3 Bitcoin Miner Online

Who is the GMO Internet Group?

GMO Internet Group’s CEO, Masatoshi Kumagai, founded the company in 1991 as an entertainment business. While operating a floundering enterprise, he came upon the internet. “I realized that the internet is like the railroad business. Lots of businesses will spring up next to the train tracks,” he said and changed the company’s focus to being an internet services provider in 1994.

Since then, GMO has become an industry leader, steadily building an empire that is now a one-stop-shop for the online entrepreneur. Under Kumagai’s leadership, GMO developed and maintains Japan’s most used domain, web-hosting, cloud-storage, e-commerce, e-security, and payment solutions. They also claim the worlds largest online FX trading platform and deal in online advertising, media, and mobile entertainment products. With headquarters in Tokyo, GMO Internet Group is comprised of 4700+ employees, between 80+ subsidiaries, across ten different countries. That’s impressive work from a high-school drop-out.

Currently, GMO’s focus is on developing online businesses, and the “new borderless economic zone” that cryptocurrencies comprise. In addition to their 2017 initiatives, this February they announced the intention to launch a cloud mining service, tentatively scheduled to open in August. To date, GMO has mined over 1900 BTC and 600 BCH since they began mining in December. With a review of GMO’s monthly reports, it’s easy to watch their exponential growth in the mining industry.

Only a week after the G2 miner was announced, they revealed plans to hide bitcoin rewards in mobile games, starting with Whimsical War, in August. Their open source project has regularly released new code, since its inception. Meanwhile, their stock value (TYO:9449) has grown by 80% over the last year.

GMO Internet Group has an overwhelming amount of experience and clout as an internet services provider, and has been building its position in the crypto-industry for nearly to two years. Overall, GMO’s rapid and impressive entrance into blockchain begs the question: “What’s Next?” Well, we already know that they plan to provide online banking services, in addition to the host of other offerings. When you add it all together with their latest miner’s incredible 33TH/s hashrate, they look to be a formidable competitor with Bitmain in the ASIC miner marketplace.