Under the "carbon neutral" policy, the blockchain computing power center is accelerating the transfer to North America

During the two sessions of this year, my country strongly launched the "carbon neutral" and "carbon compliance" policies, and many provinces and cities have introduced relevant measures to restrict blockchain mining activities such as Bitcoin.

In contrast, overseas listed companies have invested heavily in the layout, buying mining machines or acquiring shares in mining pools.

From the perspective of industry insiders, the biggest change in the computing power industry in the past year has been the transfer of the center from China to North America, and to NASDAQ-listed companies. The proportion of China’s Bitcoin computing power may have been lower than 50%.

"Carbon Neutrality" Policy is Coming Strongly

"The carbon emission policy is a severe test for the computing power industry. Policy factors will have a major impact on the development of the domestic computing power industry. It determines whether capital can enter on a large scale and determines how much space the industry has." Bixin Mining CEO Liu Fei told Lianxin.

Although the prospect is bright, the current computing power industry still faces many limitations and constraints, mainly including: technical constraints, mainly that the hash rate growth rate may approach the limit; cost constraints; environmental constraints; diminishing returns constraints; global distribution imbalance of mining pools Constraints; market monopoly model constraints, as well as institutional and regulatory constraints.

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Among them, the most noteworthy is the relationship between computing power and energy consumption. According to the design of bitcoin and other virtual currencies, its production is similar to "mining", and each computer node uses its computing power (computing power) to snatch the right to bookkeeping, so as to get bitcoin rewards. However, the mining process consumes a lot of energy.

According to the IEA's 2021 global electricity consumption ranking data, the electricity consumption of Bitcoin mining has surpassed that of Norway, the Netherlands and other countries.

Especially during the National Two Sessions in 2021, the government work report focused on "carbon peaking" and "carbon neutrality". In the context of clean energy playing the main theme, the primary task of governments around the country is to reduce the use of coal-fired thermal power generation. This means that the use of thermal power for virtual currency mining will increase costs and even be banned.

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Since miners in Inner Mongolia mainly use coal, in February this year, Inner Mongolia issued an "ultimatum" on the virtual currency mining industry. The Development and Reform Commission of the Inner Mongolia Autonomous Region issued "Several Guarantee Measures for Ensuring the Completion of the Double Control Targets and Tasks of Energy Consumption in the 14th Five-Year Plan" (Draft for Comments), which shows that in order to complete the dual control targets of energy consumption in the "14th Five-Year Plan" of the Inner Mongolia Autonomous Region, the Clean up and shut down virtual currency mining projects in an all-round way, and all exit before the end of April 2021, and propose to strictly prohibit new virtual currency mining projects.

On April 27, it was reported that the Beijing Municipal Bureau of Economy and Information Technology issued the "Urgent Notice on Finding out the Situation of Bitcoin and Other Cryptocurrency Mining Businesses in Our City's Data Centers", which requires the Beijing data center to carry out the business. Relevant information related to Bitcoin and other cryptocurrency mining will be sorted out. If relevant units are involved in related businesses, they will feed back relevant information such as power consumption and total energy consumption ratio of mining business in the past year before 12:00 noon on April 28. In response, the Beijing Economic and Information Bureau replied that the notice was indeed issued by the bureau, mainly from the perspective of the type of business carried by the data center and energy consumption, and it was for the normal business work of the bureau.

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Under policy pressure, a large number of mining equipment will be transferred to Sichuan and Yunnan, where hydropower is the main energy source, and some large miners have begun to go overseas. This can also be seen in the layout of some leading miners. For example, the latest report of Canaan Technology shows that overseas markets have become the focus of their layout. Some analysts have speculated that Texas and Kazakhstan may be the next destinations for Chinese miners. "The strength of the mining industry in mainland China will become increasingly unstable."

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"China is the region with the largest and most concentrated computing power in the world. The introduction of the national 'double carbon' policy has restricted the computing power industry in Inner Mongolia, allowing more computing power companies to make efforts to achieve the goal of 'double carbon' .” Yu Wei, the founder of Zhijian Core Cloud, told Lianxin.

Liu Changyong, director of the Blockchain Economic Research Center of Chongqing Technology and Business University, believes that in addition to regulatory policies, the main factors affecting the development of the domestic computing power industry include electronic product manufacturing and the Internet industry base, as well as the scale of the market economy. "Thanks to my country's sustained high economic growth, especially the rise of the Internet economy, my country has relatively large advantages. In addition, my country's market economy is large enough, the division of labor is very detailed, the market is active, funds are abundant, and the speed of entering and developing emerging industries soon."

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Computing power transfer from China to North America

According to a distribution map of Bitcoin mining computing power released by Cambridge University’s Center for Emerging Finance (CCAF) in May 2020, Bitcoin mining activities are mainly concentrated in China, accounting for more than 65% of the entire network’s computing power; the second The United States accounted for 7.24%, the third Russia accounted for 6.90%; the fourth Kazakhstan accounted for 6.17%; the fifth Malaysia accounted for 4.33%; the sixth Iran accounted for 3.82%. Other countries account for no more than 1% of the total network computing power.

Although the mining computing power in China has an absolute advantage, due to policies, technology, and the replacement of old and new mining machines, Bitcoin computing power is quietly but rapidly moving overseas, especially in North America. "In the past year, the biggest change in the computing power industry has been the transfer to North America and NASDAQ-listed companies. China's Bitcoin computing power may have fallen below 50%." Liu Fei told Lianxin.

According to the statistics of Guosheng Securities, as of February 19, 2021, 17 listed companies have disclosed that they have purchased Bitcoin mining machines. Among them, 10 overseas mining stocks that have disclosed their computing power hold a total of nearly 21EH/s bits. currency computing power, accounting for 16% of the total network computing power. Guosheng Securities found that listed companies keen to buy Bitcoin and its mining machines are mostly listed in the United States and Canada. According to the statistics of computing power, Nasdaq has the most computing power, close to 82% of them.

Especially since 2020, overseas mining stocks have "scrambled" for computing power, and many overseas listed companies, including Marathon Patent Group and Riot Blockchain, have announced the purchase of Bitcoin mining machines and Bitcoin.

Among them, the American company Marathon Patent Group, which occupies "half of the country" in mining stocks, has been purchasing a large number of ant mining machines since May 2020. In December 2020, MARA purchased 10,000 Antminer S19j Pros and 70,000 Antminer S19s in two installments. The estimated delivery time for the S19j Pro is August-September 2021, and the delivery time for the S19 is July-December 2021. , which makes MARA's total computing power reach 10.36 EH/s, and may become the largest miner in the United States this year.

Another American company, RIOT, currently has more than 7,040 units. The 15,600 Antminer S19 Pros ordered earlier will be delivered successively during the period from January to June. According to the information released by RIOT on December 21, 2020, the company has purchased another 3,000 S19 Pros and 12,000 S19j Pros, and the expected delivery time is May-October 2021.

Liu Fei believes, "Bitmain and Whatsminer, the two major mining machine manufacturers have supplied a large amount of production capacity overseas, which makes the new computing power have no impact on China. Even some of the domestically digested mining machines will eventually flow to Russia and other places."

"The computing power ecological chain includes chips, mining machines, mining farms, mining pools, cloud computing power platforms, computing power trading platforms, etc. It is already a very large industry with meticulous division of labor. In general, the computing power industry has been highly specialized. The advantages of teams or projects with rich experience, strong technical force, and strong capital are becoming more and more obvious, and the threshold for ordinary people to participate is getting higher and higher.” Liu Changyong told Lianxin.

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