Mongolia’s Cheap Electricity Attracts Japanese Bitcoin Miners
January 14, 2019 12:13 pm
Cheap electricity and cold weather are proving to attract a growing number of Japanese bitcoin miners to Mongolia. A country which lies between two of the most powerful nations in the world; China and Russia.
Tokyo-based e-wallet company, Ginco is currently carrying out its crypto mining operations in Ulaanbaatar, Mongolia’s capital. Ginco is operating two mining farms in Mongolia’s Capital, one of which is located at an underground structure in a condominium complex.
Everything combined, Ginco currently operates 600 mining machines, with plans to increase the number to 1,000 units in the current quarter. The CEO of Ginco, Yuma Furubayashi said, “The business environment is increasingly harsh, but we can still produce profit,” to the Japanese publication Nikkei Asian Review on January 11.
The market has been ruthless to the companies which have been active in cryptocurrency mining over the past year. In the same period, the price of BTC has dropped more than 80 percent from its all-time high record of almost $20,000 in December 2017. The plunge in Bitcoin’s price caused a slump in mining activities. In combination with price decline, bitcoin mining turned less profitable as a result of the network’s soaring hash rate.
One of the examples includes Japan’s Bitcoin mining hardware manufacturer GMO internet Inc., which had to shut down operations at the end of December, after revealing a loss of 24 billion yen ($218 million). However, the company continued in-house mining activities and also announced that it is migrating its mining center to a region with cleaner and economic energy.
In November, Giga Watt, a U.S based mining company filed for bankruptcy at a court in the Eastern District, Washington. The company disclosed that it owes almost $7 million to its 20 unsecured creditors.
On the other hand, the freezing weather and low electricity cost in Mongolia, have made it one of the few countries where bitcoin miners can still generate a profit. The U.S and Sweden are also profitable countries for miners.
The cold temperature helps in cooling down mining hardware, and eliminates the need for cooling systems. Further, the low energy cost proves to be a critical factor in making profits out of mining operations. The electricity prices in Mongolia are around a third of Japanese rates and cheaper than in China.
While crypto mining has increased rapidly over the years, it is imperative to consider various environmental aspects which are impacted in the process. Cryptocurrencies are already having a significant influence on the world economy, but the main concern that remains is sustainability.