China is not the only country that wants control of this highly coveted industry. Taras
Kulyk, Senior Vice President of Blockchain Business Development at Core
Scientific, says that the countries competing to become leaders in the
Blockchain space vary greatly in what they can offer to crypto miners.
During
an interview with Cointelegraph, Kulyk stated that global
diversification of hashrate has been increasing as countries around the
world vie for control of the crypto mining industry.
Kulyk believes that China has been a desirable hub
for crypto mining due to specific factors it enjoys, specifically the
low cost of labor, access to units, and decreased cost of power during
the rainy season, but he clarified:
“One key
economic concern driving recent crackdowns by authorities is theft of
power which local politicians then have to clamp down. Another key
economic concern driving regulatory uncertainty is capital control
issues. Both of these have made the current regulatory environment in
China uncertain for digital mining companies.”
Turmoil at the highest level of politics in any country or jurisdiction will likely cause the existing operators to reduce planned capital expenditure or worse, shut down and relocate, says Kulyk.
He
pointed out that crypto mining “is extremely capital intensive, meaning
that operators require stability over long periods of time to ensure
their deployed capital recoups and provides an ROI.” He also warned that
political unrest “can disrupt this much-needed stability.”
Kulyk noted how new regulations have impacted country-specific competitors such as Iran, Ukraine, Canada, and Kazakhstan:
“Generally,
we’re seeing the regulatory burden for digital mining easing off, as
it’s increasingly viewed as a way to reinvigorate sunset industry assets
into being useful in the technology 2.0 economy. Governments are
turning to their regulatory policy, particularly making their policy
more favorable to mining, in order to gain competitive advantages over
other players in the mining industry.”
As regulatory clarity emerges
around crypto mining, Kulyk believes that “we’ll continue to see
institutional investors allocate portfolio room to leaders in the
space,” and concluded that:
“The stronger
the leadership team and transparency around ownership and operations,
the more likely a company will be a target for investors who are looking
to get involved with digital mining.”
source link : https://cointelegraph.com/news/geopolitical-risks-prevail-as-new-players-emerge-in-the-crypto-mining-space
