Halving increases exodus of Bitcoin mining equipment to Latin America and Africa

Important facts:
  • One expert estimates that at least 600,000 Antminer S19 devices will enter the second-hand market.

  • Paraguay and Ethiopia are countries that are speculated to be involved in Bitcoin mining.

The Bitcoin halving is about to happen and miners on the network are already starting to fine-tune their strategies to remain operational after the mining rewards halving. In this scenario, the need arises to achieve the necessary conditions to keep the old generation equipment profitable, given that the shortage of electricity and current prices (the main input for Bitcoin mining) affect the profits obtained with this teams. Will have negative impact.

In this sense, estimates Ethan Vera, director of operations at Luxor, a logistics and cryptocurrency mining services provider. At least 600,000 Antminer S19 (90 TH/s), which represent the majority of currently active machines are leaving the United States for Latin America and Africa, indicating a report From Bloomberg.

Besides, Nearly 6,000 Bitcoin mining machines Older generation computers belonging to the company Sunnyside Digital, which has several million such computers, are waiting in a warehouse in Colorado Springs, where they will be refurbished and sold to foreign buyers seeking to profit from mining in the high-density environment. Will be sold again. Lower cost, source says.

In parts of the world where energy is cheap, such as Ethiopia, Tanzania, Paraguay and Uruguay, buyers of used machines are working, “it’s a natural migration”. “The halving accelerated that,” said Taras Kulik, CEO of Sunnyside Digital.

Bitcoin mining machines in Colorado warehouse awaiting overseas shipping
Bitcoin mining machines in a Colorado warehouse awaiting overseas shipping. Source: Sunnyside Digital.

With the arrival of the halt, Older generation Bitcoin mining equipment, such as the Antminer S19 or Whatminer M30 (86 TH/s), will no longer be profitable in the United States. This is because these models will not generate enough Bitcoins considering their efficiency (about 38 Joules per terahash) and electricity costs.

Incidentally, Jaran Mellerud, CEO of Dubai-based Hashlabs Mining, said that while the S19 series and similar models may not be profitable to operate in the US after the halving, “they can still make profits.” Have civilized and long life if they live in some parts of Africa. This is the strategy of many miners like Nuo Xu, who has two Bitcoin mining farms in Texas and plans to deploy about 6,000 machines in Ethiopia or Nigeria.

As reported by CryptoNoticias, Bitcoin miners have found a new haven for their activity in Ethiopia, where the Great Ethiopian Renaissance Dam is located, a dam 145 meters high and with a water flow of 14,700 cubic meters per second. Whose installed capacity is 6,450 MW. The price of electricity in Ethiopia is around USD 0.06 kWh, One of the lowest in the world.

Paraguay is one of the mining paradises that Bitcoin miners want to promote due to its low cost of electricity. Marathon Digital is building a mining farm that will use power from the Itaipu Dam with a capacity of 27 MW. Despite the fact that many companies are establishing themselves in the country, local authorities have launched a campaign against clandestine mining farms and have seized thousands of devices that illegally extract electricity, even their Fine has also been imposed on the owners.

Equipment cost and its profitability

According to Lauren Lin, director of business development at Luxor, some buyers are waiting until after the halving to purchase mining equipment, believing that its prices will drop further. According to Luxor, the price of a used S19 model in March 2022 was around $7,030. A year later the price dropped dramatically to $900, as Bitcoin prices dropped in the market. They then fell further today to $427, and It is estimated that after the sales stop, it will be sold for around US$356 in May.

In the United States they amount to about 7 cents per kilowatt hour. According to Hashlab’s Mellerud, the rate in Ethiopia is about 5 cents. The difference of two cents is significant for Bitcoin miners.

In Ethiopia and Paraguay, electricity is much cheaper than in other parts of the world, according to a report by CryptoNoticias, as shown in the list of countries where mining Bitcoin would be more profitable. “Ethiopia is really becoming a big player in the digital mining ecosystem,” Sunnyside’s Kulik said, adding that his company is negotiating a deal to help move 20,000 to 40,000 bitcoin mining rigs into the country. East Africa.

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