Bitcoin’s ‘Halving’ Drives Exodus of Old US Mining Computers Abroad
Amid Bitcoin’s impending “halving,” U.S. mining rigs migrate abroad seeking lower operational costs
As the Bitcoin blockchain prepares for a major quadrennial update known as the halving, approximately 6,000 older Bitcoin mining machines in the United States are set to be idled and shipped abroad in search of lower operational costs. According to a report by Bloomberg (via MSN), these outdated machines will be sent to a warehouse in Colorado Springs, where they will be refurbished and resold to buyers overseas looking to profit from mining in more cost-effective environments.
SunnySide Digital, a wholesaler, operates the 35,000-square-foot facility where the equipment will be refreshed. The company anticipates receiving hundreds of thousands of outdated machines as miners seek to upgrade to the most recent and efficient technology in light of the upcoming halving event. The halving, which occurs approximately every four years, will reduce the reward for miners, prompting them to seek ways to maintain profitability by reducing operational costs.
With electricity costs being a significant expense for mining companies, including industry giants like Marathon Digital Holdings Inc. and Riot Platforms Inc., the migration of older mining computers abroad is seen as a natural response to the changing landscape. Buyers in countries where power is cheaper are eager to acquire these machines, with many operating in regions such as Africa and South America.
Ethan Vera, chief operating officer of Luxor Technology, a crypto-mining services provider, estimates that around 600,000 S19 series computers, the most commonly used machines, are being shipped out of the United States to countries in Africa and South America. These specialized machines play a crucial role in validating blockchain transactions in Bitcoin mining and provide operators with fixed token rewards.
As the halving event approaches, the urgency to bring more efficient machines online has increased, with continued use of older equipment potentially leading to electricity costs surpassing mining revenue. While these older machines may no longer be profitable to run in the United States post-halving, they still hold value in regions with lower electricity costs, offering miners the opportunity to generate profits and extend the lifespan of their equipment.
In contrast to the exodus of mining rigs from the United States, Iceland’s Prime Minister, KatrÃn Jakobsdóttir, has announced a shift in energy use away from cryptocurrency mining towards agriculture. The move aims to increase food production and strengthen the country’s food independence while utilizing renewable energy resources for household and industrial purposes.
The global cryptocurrency mining landscape is undergoing significant changes as the halving event approaches, prompting miners to seek more cost-effective and efficient solutions to maintain profitability. While some regions like Africa and South America are emerging as attractive destinations for mining operations, countries like Iceland are reevaluating their priorities to ensure sustainable energy use and economic diversification.
