China has become one of the world’s biggest sources of cryptocurrency mining but there are signs Beijing is increasing scrutiny of the sector’s players and may ask local authorities to regulate the vast amounts of power they use.
Bitmain Technologies, operator of some of China’s biggest mining farms, is among several companies looking to expand overseas.
Spokesman Nishant Sharma said the firm was looking at sites in the energy-rich Canadian province of Quebec ahead of a potential crackdown by Beijing.
Bitcoin mining consumes large quantities of energy because it uses computers to solve complex maths puzzles to validate transactions in the cryptocurrency, which are written to the blockchain, or digital ledger.
The first miner to solve the problem is rewarded in bitcoin and the transaction is added to the blockchain.
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While Beijing has not issued any official edict on the bitcoin mines, two Chinese miners claimed local authorities were more unwilling to allow expansion and had started to shut down some mines.
Li Wei, chief executive of ZQMiner, a Wuhan-based company that sells bitcoin mining equipment and has mines in three Chinese provinces, said: “We, and from what I understand many of our peers, are already making plans to go overseas.”
The challenge for miners is finding existing facilities in Quebec that already have buildings and other infrastructure in place to use the large energy supply required for cryptocurrency mining. A new facility would take about a year to become operational.
Hydro Quebec described a potential sales pipeline of around 30 large cryptocurrency miners after a campaign by the public utility to attract data centres to the province triggered a flurry of interest from bitcoin miners in 2017.
Director of business development David Vincent said: “Of the world’s top five largest blockchain players, we have at least three or four.”
Hydro Quebec, which offers some of the lowest electricity rates in North America, said the province has an energy surplus equivalent to 100 Terawatt hours over 10 years.
Customer vice-president Eric Filion said: “We have the energy available. It’s a question of finding land and buildings quickly.”