Bitcoin ‘Halving’ Spurs Exodus of Old US Mining Computers Abroad

(Bloomberg) — About 6,000 older Bitcoin mining machines in the US will soon be idled and sent to a warehouse in Colorado Springs where they’ll be refreshed and resold to buyers overseas looking to profit from mining in lower-cost environs.

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Wholesaler SunnySide Digital operates the 35,000 square-foot facility taking in the equipment from a mining client. The outdated machines are among several hundred-thousand it expects to receive and refurbish around a major quadrennial update in the Bitcoin blockchain.

Known as the halving, the late April event will slash the reward that’s the main revenue stream for miners, who will try to lessen the impact by upgrading to the latest and most efficient technology. With electricity the biggest expense, mining companies including publicly traded giants Marathon Digital Holdings Inc. and Riot Platforms Inc. need to lower usage costs to maintain a positive margin. Their older computers may still bring a profit, just not likely in the US.

“It’s a natural migration” with buyers of the old machines operating in parts of the world where power is the cheapest, said SunnySide Digital Chief Executive Officer Taras Kulyk, who has resold US computers to miners in countries such as Ethiopia, Tanzania, Paraguay and Uruguay. “This is accelerated by the halving.”

Some 600,000 S19 series computers, which account for a majority of machines currently in use, are moving out of the US mostly to Africa and South America, according to an estimate by Ethan Vera, chief operating officer at crypto-mining services and logistics provider Luxor Technology in Seattle.

In Bitcoin mining, specialized machines are used to validate transactions on the blockchain and earn operators a fixed token reward. Anonymous Bitcoin creator Satoshi Nakamoto baked in the once-every-four-years halving to maintain the hard cap of 21 million tokens. Next month’s event is the fourth since 2012 and the reward will drop to 3.125 Bitcoin from 6.25 now.

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Read more: What Is Bitcoin ‘Halving’? Does It Push Up the Price?: QuickTake

Bitcoin has surged about 50% this year to around…

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