The China’s government dealt a stern blow to the cryptocurrency mines on the mainland earlier, which caused the latter to stop running, with the hashrate plummeting from the record high at 180 PH/sec to the recent low at 130 PH/sec. It shows that quite a large quantity of them have had their main power switched off. Having said that, closing up does not mean bowing out of the game for good. There are signs of these mines getting prepared vigorously to move to other countries such as Kazakhstan in the neighborhood, given that they are prohibited from operating in China.

Kazakhstan is a developing country with relatively cold climate as well as inexpensive resources of coal for power generation. For the mining industry that produces a great deal of heat, saving refrigeration cost is exceptionally inviting. To Kazakhstan, the mining businesses that consume a large amount of electricity is a stable source of income, hence the best clients of power plants. The need for electricity will spur the supply of manpower in the power supply industry, and advancement of know-how, so that the GDP can be increased, then a win-win situation attained.

When it comes to environmental pollution caused by coal-fired power generation, developing countries are too busy to take care of it. They might as well scrape a meager living first. Besides, according to reports by the media, the countries in North America and Northern Europe with a comparatively stable political environment are places that these mines consider migrating to. Having suffered from the national policies, the businessmen are palpably panic-stricken. So, they would prefer to bear relatively higher costs rather than operate their businesses in a state of anxiety. The reason why they have been going from pillar to post everywhere is that at the end of the day, they are sanguine about the values of cryptocurrencies. A lucrative business will be accommodated somewhere after all. I reckon that in the coming few months, the hashrate will get back to its previous level after the migrated mines settling down in a new place.

As such, after miners have their confidence back, cryptocurrencies will naturally appreciate again. We are still convinced that the outlook of cryptocurrencies is promising in the long run. Definitely, the current exchange rates are special prices. Readers interested in learning more about it are welcome to contact us.

All the above-mentioned is not investment advice.

(Li Sze-chung, co-founder of CoinUnited.io and partner of RedSo. fb.com/liszechung.it )

This article is translated from Chinese by Apple Daily.

Click here for Chinese version

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