The combination of cheap electricity and cold climate draws Japanese bitcoin miners.
The Tokyo-based company Ginco, a manufacturer of e-wallets, manages two mining farms in Ulan Bator, capital of Mongolia. One of the objects is located in the underground building in the condominium complex. The company started its operations in October last year, when her colleagues around the world intended to stop the mining of cryptocurrencies in connection with the fall in the value of bitcoin.
Currently Ginco uses 600 units of equipment for mining. In the first quarter of 2019, their number can grow to 1000. According to Yuma Furubayashi, chief executive officer of Ginco Mongol, the business environment becomes more severe, however, the company can still make a profit.
Another Japanese company called iTools renting equipment from Tokyo advertising group Unimedia, began mining operations in Mongolia last summer. At the moment the company has no plans to expand its fleet of mining equipment, but CEO Tamir Bayarsaikhan said that in the near future iTools can start creating a new business using the blockchain technology.
In 2018, the companies responsible for the mining of crypto-currencies, have experienced serious problems due to the reduction in the price of BTC more than 80% and the network’s rising hashrate. As a result, many miners are on the verge of bankruptcy.
For example, in December last year, the Japanese manufacturer of equipment for mining bitcoins GMO Internet Inc. curtailed their activities in connection with the loss of 24 billion yen ($218 million). Earlier American mining company Giga Watt declared bankruptcy because of debts in the amount of $ 7 million, which has not been returned to the creditors. Many of the Chinese firms was forced to sell the mining hardware as scrap metal, to somehow reduce the loss.
However, Mongolia, as well as Sweden and the United States, is one of the few countries where miners bitcoin can still count on a profit. The low cost of electricity and cold climate allow mining companies to save a significant amount on cooling systems. Energy costs are a key factor in the equation of profit cryptocurrency mining. According to Nikkei Asian Review, the cost of electricity in Mongolia is three times lower than in Japan and China.
Last year, the Central Bank of Mongolia has approved a cryptocurrency legislation, and the largest Mongolian telecommunication network Mobicom decided to create his own cryptocurrency called Candy, whose value will be tied to the national currency of the country.
Mongolia recently announced a partnership with Terra, a blockchain payment system that is backed by exchanges such as Binance and Houbi. According to Forbes, the program will launch with two features: a peer-to-peer payment system to allow transfer among users of different banks, as well as a mobile payment system.