When China promised to crack down on cryptocurrency mining earlier this summer, Bit Digital Inc., listed on the Nasdaq, stepped up efforts to get its more than 20,000 computers out of the country.
Machines are the heart of the New York-based company, which makes money by connecting high-powered computers to cheap power sources so they can work out math problems to unlock new bitcoins. The process, called mining, has gone from something anyone with a PC could do a decade ago, to a massive industry that uses numerous computers and a lot of electricity.
Bit Digital and other cryptocurrency mining companies now face many hurdles when they move machines from a country that previously used two-thirds of the world’s energy spent on bitcoin mining. The machines are susceptible to damage if shaken, which makes packing and international shipping a cumbersome task. A single new computer can cost about $ 12,000.
Companies have had to decide whether to move their computers by air or sea, taking into account the cost and duration of transportation. Bit Digital said it still had 9,484 mining machines (or nearly a third of its equipment) in China’s Sichuan province as of June 30th. in late September, said Samir Tabar, head of strategy at Bit Digital. The company ships machines to locations in Nebraska, Georgia, Texas and Alberta, Canada.
The whole process can cost millions of dollars. Oil prices have risen in recent months and shipping bottlenecks created by the coronavirus pandemic have led to rising transportation costs. China’s computers entering the U.S. are also subject to a 25% tariff. Aside from figuring out how to package and ship the machines carefully, companies need to find facilities with a lot of power to move them.