Cryptocurrency mining is moving into Mongolia, reported the Nikkei Asian Review today, citing Mongolia’s cheap electricity and very cold environment, both of which are ideal for mining.
Nikkei reports that a Japanese cryptocurrency company, Ginco, which “develops a secure mobile client-side cryptocurrency wallet,” is expanding into mining in Mongolia. Ginco’s CEO, Yuma Furubayashi, said of the mining scene that “The business environment is increasingly harsh, but we can still produce a profit.”
Time will tell if Furubayashi is correct, howeve. Another Japanese firm, e-commerce giant DDM, only recently shuttered its cryptocurrency mining operation citing “deteriorating profitability,” although the mining itself was located in Japan.
Mongolia’s Trade and Development Bank is reportedly cooperating with Ginco and generally encouraging the crypto mining industry to come, by planning “add crypto mining to its fleet of leased equipment, along with mineral mining and farming machinery.” Nikkei also reports that Mongolian infotech company iTools had plans to expand its mining operations, before the dwindling crypto market changed its plans.
Why Not China?
China has often been thought of as the center of cryptocurrency – especially Bitcoin – mining. Articles have abounded in past years, even in non-crypto media, portraying vast mining farms located in China, where most of the application-specific integrated circuit (ASIC) miners used in cryptocurrency mining have historically been produced.
But a recent in-depth report from UK-based CoinShares on how and where bitcoin mining is accomplished, portrays a dynamic and changing field – one in which mining in China is on the wane.
According to the report, Chinese miners have benefitted from some specific geo-economic circumstances in some regions of the country – principally in Sechuan – which allowed miners to take advantage of unusable gluts of renewable energy due to copious government investment in past years. This report came as a direct rebuttal to a now controversial report in Nature magazine claiming that Bitcoin mining could alone result in environmental disaster.
The CoinShares report emphasized that, because of a “combination of cheap abundant electricity, friendlier regulation, fast internet connections and, to a lesser degree, cooler climates” outside China, mining power was rapidly redistributing to other countries.
Cryptocurrency Mining Amid the Bear Market
CryptoGlobe recently reported that Bitcoin’s mining difficulty climbed for the first time in months. Mining difficulty reflects hashrate, and a climbing hashrate (see chart below) could be taken as a sign of encouragement and renewed confidence in the crypto market.