Kuwait and Argentina are the future? We discussed the new world’s crypto capitals with The Mining Future

The crypto mining market is one of the most unstable in the world today. The localization is migrating from one country to another, bitcoin price is going high and low like on a rollercoaster, legalization issues arise more often, new equipment especially with different inbuilt cooling is joining the market each day. How would the mining geography look like tomorrow?

We talked with The Mining Future that is providing crypto mining hosting and consulting. Gilbert Corbella who is Co-Founder and Chairman at The Mining Future FZCO (Free Zone Company) told us about the mining map in 2023 and the near future.

Since China stopped mining within its territory, the USA became the country with one of the highest numbers of miners. And now we see the tendency of leaving it. Why is it happening? What are the main reasons? 

When China banned crypto mining back in 2021, the miners fled the country in favor of more friendly jurisdictions and areas with excess and cheap energy. One of the big benefitted was the USA. Over the last 2 years the USA has absorbed and aggregated as much as 35-40% of the global Bitcoin Hashpower.

However, the recent crypto bear market, in combination with other factors such as regulatory uncertainties, has put a lot of pressure on an already saturated market, where the USA energy prices have become not as attractive as they used to be. In order to survive, crypto miners started looking for other viable alternatives.

Texas was almost the crypto mining capital of the States. Is the situation changing even there?

While there is no doubt that Texas has become the largest crypto mining hub in the USA, and probably in the world, the initial synergies encountered between the Texas grid operator and the miners in order to better control the stability of the grid, has become an issue due to too high influx of miners. That has forced the government to propose some bills to limit the benefits and credits that miners can get from participating in the stability of the grid, as well as limiting other benefits. That’s why I can definitely say that the situation is changing in Texas as well.

The US presidential election is coming in 2024. And candidates such as Robert F. Kennedy Jr. and Vivek Ramaswamy are talking in favor of the cryptocurrency tendency and cryptomining itself. Isn’t it enough for the community to stay in the States a bit longer and see how the sphere will be changed?

There are plenty of voices within the American political sphere that are very open to embrace bitcoin and altcoins and all that comes with it, including crypto mining. However, there is not yet a wider acceptance from many of the American institutions and authorities, and therefore I believe there is still a long way ahead. We just need to look at the latest movements from the SEC (Securities and Exchange Commission) to realize that the path is not going to be a walk in the park. This type of regulatory uncertainty is definitely not helping America to faster develop and adopt this new technology.

The UAE has literally become a world’s crypto capital. The biggest and most prestigious conferences are held in Dubai and top mining companies are heading there. Why is this particular country so popular among miners? What are the main reasons?

The UAE has become a safe haven in many aspects. With a clear crypto-friendly jurisdiction and proper regulation, accessible for everybody, plenty of crypto start ups are choosing the UAE as their destination. And in addition, it offers abundant and cheap electricity as well, making it a great destination to be considered for crypto miners.

There can’t be only one country that replaces the USA, can it? So, what are the other ones? What are the alternatives for those who leave the States and don’t want to migrate to the UAE? And why do those countries attract miners?

In essence, the miners are in constant search of cheap electricity sources in order to keep surviving in a high competition industry. However, the patterns of electricity prices normally follow the basic laws of supply and demand. Therefore, areas with high supply but low demand will offer cheap rates for miners, despite this might mean being in remote or underdeveloped areas. 

Miners will be attracted to these regions like magnets as far as other elements can be guaranteed; such as political stability, regulatory certainty, tax benefits, safety, etc. And the early ones to deploy their farms in these areas will be the ones that benefit the most before  additional inflow of new miners into these areas will end up balancing the supply and demand equation, up until the point when mining will not be attractive anymore; similar to what has happened to the USA and to Texas over the last months. That is why several regions in Latin America, the Middle East, Southeast Asia are becoming new areas to be explored by crypto miners.  

As you are already working within such future crypto mining centers as Argentina and Kuwait, can you share some experience? What’s the specificity of these countries? 

We selected both Argentina and Kuwait to deploy some of our farms as they offered some of the best electricity rates in the world, while being located in relatively low risk jurisdictions. Despite no clear regulations exist around crypto mining in these countries, they have not opposed crypto mining so far, while they are welcoming cryptocurrencies adoption in other areas. We are positive that both countries will keep working in creating a safe regulatory environment that will welcome crypto miners and a wider crypto adoption in the next few years.

You have also recently started working with the Dominican Republic, haven’t you? What are the reasons that influenced your choice and what are the plans in this country?

That is true, and despite the fact that we haven’t yet actively advertised our new opening in the Dominican Republic farm, we have surprisingly exhausted all our pre-sales mining slots that were reserved for existing customers in less than 2 weeks. That was an amazing sales performance beyond our expectations, so we are working hard to offer additional capacity within the next few weeks that will be made available to new customers as well. 

We believe the Dominican Republic offers a very safe environment with much below market prices of electricity compared to other North American locations, and since it is closer to the USA vs other Latin American regions, it can be a very interesting spot for miners that want to diversify or relocate their operations, while not investing large amounts on shipping costs and importing duties. And the best is that there is not much competition in the country yet, so we are at a stage where we plan to grow fast leveraging on the escalation opportunities that the Dominican Republic is offering right now.

What do you think about the future geography of mining? How will it change?

The mining geography is like a fast changing spectrum that adjusts itself beyond borders and countries to exploit the best opportunities to use cheap energy resources. By promoting and welcoming crypto miners, many countries, regions, governments and institutions will find the benefit of developing areas where today they have high supply and low demand of energy. 

Crypto mining will become the solution to monetize that excess energy that would be otherwise wasted, and with the profits made by the crypto miners fresh money will flow into further development of cheap electricity sources, such as bigger, faster and more sustained investment into renewable energies in the long run. Crypto mining, and especially Bitcoin mining as the lead, is the catalyst that humankind needed to move into a full green energy world. 

Unfortunately, it will take some time until this will be realized among many countries, but the lucky part is that leading countries such as El Salvador, among others, will show how the benefits of fast adoption come earlier than expected.