Chinese crypto mining pool Poolin has resumed partial payouts for holders of its bitcoin and ethereum hash rate tokens as it gradually deploys equipment overseas following China's industry crackdown.
Poolin said in an announcement on Monday that 18% of its bitcoin miners that are used to back its pBTC35A hash rate tokens have been shipped out of China and powered up – about 50 days after the firm said it had to suspend the mining payouts for migration due to the disruption caused by the Chinese government.
But the process has brought on comparatively hefty prices and in a broader sense reflects the challenges that Chinese bitcoin miners could encounter amid their exodus from what was once the world's biggest mining hub.
For instance, when Poolin initially rolled out the pBTC35A token -- backed by miners located inside China -- it was able to achieve an electricity rate of $0.058 per kWh. Now, after the relocation, whoever holds and stakes the pBTC35A token would receive a payout after the deduction of an electricity cost of $0.08 per kWh, which represents a nearly 38% markup.
Similarly, for its pETH18C Ethereum hash rate token, the electricity rate now has jumped to $0.15 per kWh, double the previous $0.0750 per kWh when the GPUs were located inside China.
Cost aside, Poolin said the "recurrence outbreaks of COVID-19 impacted on both domestic and international logistics," thus exacerbating the difficulty in migrating a significant amount of hardware.
"Frequent loading/unloading, multiple stopovers and long-distance transportation caused damage to some mining rigs (more than 20% miners need to be repaired according to the current stats), and the surge of mining rigs overhaul and shelving dramatically intensified the workload on local operation & maintenance staffs," the firm explained.
Poolin said the mining hardware that backs the hash rate tokens has been dispatched globally while its founder and senior executives have been sourcing electricity deals and capacities in the U.S.
There are a total of 214,601 pBTC35A circulating tokens issued by Poolin, equal to 214,601 TH/s of bitcoin hash rate. So far Poolin has resumed the equivalent of 39,900 TH/s. It has resumed the online rate to 25% for the ETH miners that back its pETH18c token.
Poolin expects those online rates to be doubled in the coming two to three weeks and keep rising as it finishes the relocation.
As The Block reported last week, China's crackdown on the crypto mining space has not only disrupted the hash rate dominance in the country but also led to a reshuffle in the market share among mining pools.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.