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Chinese Miners Move to Alternative Cryptocurrencies to Continue Operating

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Jul 24, 2021
Chinese Crypto-Investors Moving Funds Out of China

The crackdown in China on crypto mining has forced many miners to halt their operations and move to other regions. However, there is a group of miners that have decided not to relocate and are instead planning on moving towards new and more efficient mining schemes in order to continue operating in the country. These miners are now targeting proof-of-stake-based systems and lesser-known tokens as a way to continue their operations and steering clear of government oversight. The lives of thousands of miners were affected by the recent trading and mining crackdown in China. 

These miners were forced to shut down their operations because of the new policies that had been established by the country’s government. There are a number of them that have chosen to relocate to other crypto-mining friendly countries, but some want to stay in China and believe that switching to alternatives is the way to go. This group of miners is focusing on the new iteration of storage-based tokens. Some of the miners who are part of this group expressed their interest in Filecoin and they added that this could be a safer bet because its mining process appears to be less energy-intensive. 

But, there were also other miners that said Filecoin was not a good alternative because it is a ‘grey business area’, which hasn’t caught the attention of regulators as yet. This explains the reason behind the interest in it. Swarm is another storage-based token, which has drawn the interest of these miners and this currency shares the same proposal as Chia and Filecoin. However, it has to be said that these miners appear to be the bravest of the lot because there is a strong possibility that the Chinese government could target these cryptocurrencies in the near future. 

Experts have said that there are some miners who are still in the wait-and-see phase because they expect that the government will take further action. But, the signs don’t really seem to be favorable. Last week, another Chinese province by the name of Anhui announced that it would be cracking down against bitcoin mining operators in the area because of the power shortages. Zhizhen Capital’s managing partner, Tan Weizhe said that there is still a significant number of miners who are waiting to relocate to other areas. Most of them are planning to relocate next October. 

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Weizhe is responsible for running mining power migration services and they also operate a number of crypto complexes in Australia, Canada, and the United States. As the crackdown against trading and mining operations intensifies, the Chinese government is also increasing the scope of its testing phase of the digital yuan, the central bank digital currency (CBDC) developed by the People’s Bank of China (PBOC). This crackdown is primarily because of the electricity shortages that have been happening in China and they are certainly not unique to the country. Other countries are also experiencing the same and imposing bans on crypto mining for this purpose. 

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