Bitcoin halving in April to cut mining reward, driving an exodus of old US equipment to countries with cheap electricity
- Bitcoin halving, a once-every-four year event baked into the system, will slash the reward that is the main revenue stream for miners
- Mining companies are upgrading to newer and more efficient technology while moving old computers to Africa and South America
About 6,000 older bitcoin mining machines in the US will soon be idled and sent to a warehouse in Colorado Springs, where they will be refreshed and resold to buyers overseas looking to profit from mining in lower-cost environments.
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 The outdated machines are among several hundred-thousand it expects to receive and refurbish around a major quadrennial update in the bitcoin blockchain.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 is 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 and Riot Platforms 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.”
