Here's the new geography of the bitcoin mining industry

A new era is dawning for the global bitcoin mining industry. After China dropped the hammer on local mining operations in June, roughly 90,000 petahashes per second (PH/s) of hash rate, or mining power— about 50% of the network — went offline.

Mining firms with operations in China are now scrambling to sell their machines or move them to other countries. Meanwhile, their counterparts around the world have been enjoying a bigger share of the network’s daily block rewards — and plotting their expansion.

The graphic below shows the major mining firms — including companies that mine crypto themselves and those that host mining machines for customers — that have operations or are planning to launch operations outside of China. These firms are poised to capture a bigger share of the multi-billion dollar bitcoin mining market in the foreseeable future.

Publicly listed non-Chinese bitcoin mining firms

Fourteen of the companies in the graphic above are publicly listed, and 11 of them currently have operations outside China. The table below shows how much computing power these firms have at the moment — and how much they've said they would add in the near future. For reference, at bitcoin’s current mining difficulty, 1 PH/s of computing power can mine 0.00931 BTC in 24 hours in theory. Multiplying that by each miner’s current hash rate can give a rough estimate of a firm’s daily mining results.

Most of the public bitcoin miners are listed in either the U.S., Canada or the U.K., or in some cases they are listed in two different places. Argo Blockchain, for instance, is listed on the London Stock Exchange and Bitfarm is listed in the Toronto Stock Exchange but they are both hoping to be listed on the Nasdaq.

Marathon Patent Group is the public mining firm that has the largest scaling plan for the near future. It pre-ordered over 100,000 units of the newest generation of bitcoin ASIC miners from Bitmain, which are expected to be fully delivered by the end of Q1 2022.

According to Maratahon’s financial disclosure, it currently has 19,395 miners running at a max capacity of 105 megawatts (MW) in its Hardin, Montana site. It’s expecting another 12,000 miners by October, which will also be installed at the Hardin site.

The remaining 73,000 miners from Bitmain will be hosted in a 300 MW facility that mining colocation provider Compute North is building in Texas. 

Riot Blockchain and Bitfarm have ambitious scaling plans — though they are less ambitious than Marathon’s. Riot pre-ordered equipment from Bitmain while Bitfarm pre-ordered from MicroBT.

By the end of July, Riot anticipates that it will have a total of 23,946 Bitmain’s newest generation of AntMiners in operation. It anticipates having a total fleet of 81,146 AntMiners by Q4 2022. They will be installed at its Whinstone facility in Texas as well as at Coinmint’s facility in New York. Bitfarm, on the other hand, pre-ordered 48,000 units of WhatsMiners from MicroBT in March this year.

Below is a chart showing the hash rate percentage breakdown of the publicly traded bitcoin mining firms based on their announced current hash rate.

Private non-Chinese bitcoin mining firms

Among the private bitcoin mining firms, some are in the self mining business and some have a hybrid model of both hosting and proprietary mining.

Core Scientific, which is going to list on Nasdaq through a SPAC deal, is the one that could be seen as the biggest rival to Marathon in terms of the hash rate scaling ambition. Core Scientific is also going through the process to acquire Blockcap, which was founded by the same founder behind Core Scientific.

Core Scientific said in April that it executed a purchase agreement with Bitmain for another 112,800 units of its newest generation of the AntMiner S19 series machines. With that purchase, Core Scientific’s total equipment on-order would amount to 188,824 units of the S19 series to be delivered throughout this year and next year.

More than half of the equipment is for Core Scientific’s proprietary mining and the remaining is purchased on behalf of its hosting clients. The firm said that in line with its hash rate expansion, it is also expanding its mining facilities that boast a capacity of 550 MW by end of the year.

China’s public mining firms

It’s hard to know just how many mining operations there are, or were, in China, and how they are all reacting to the crackdown, since many of them are not structured as companies. There are, however, three publicly-listed Chinese mining firms, which were not included in the first table. Here’s an overview of their operations in China prior to the country’s crackdown:

Previously known as the online sports lottery firm 500.com, BIT Mining had 50,113 ASIC bitcoin miners deployed in Xinjiang and Qinghai as of May. Immediately after the crackdown, it said it would ship 3,000 of those to Kazakhstan by July. In a progress update on Wednesday, BIT Mining said it has shipped and deployed 3,819 bitcoin miners with a total hash rate of 172 PH/s at data centers in Kazakhstan.

"A further 4,033 bitcoin mining machines with a total hash rate capacity of 121 PH/s have been shipped to data centers in Kazakhstan and are awaiting deployment," the firm said. In addition, it has acquired 2,500 more machines that are expected to be delivered within one week and will be deployed in Kazakhstan as well.

Less than a month after its facilities in Sichuan were shut down, BIT Mining raised $50 million via a private stock placement in order to acquire more machines and build data centers overseas. It has also completely exited its lottery business to focus entirely on mining.

BIT Digital is perhaps better off than BIT Mining and The9 since it already had part of its mining fleets located in North America. As of April 30, while 80% of its total 40,000 miners were inside China, it had about 8,500 units in Canada and the U.S. Its hosting partner was Compute North. 

After China’s crackdown, BIT Digital started shipping 14,500 miners to the U.S. and aims to ship the remaining China-based miners (nearly 9,500 units) in the third quarter of this year. It also liquidated about one third of its China-based fleet during the second quarter.

Canaan Creative, a manufacturer for bitcoin ASIC miners, also announced the commencement of its proprietary mining operations in Kazakhstan but has not yet revealed its current or future hash rate.