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China’s crackdown on crypto has forced Bitcoin (BTC) miners to shut down their operations in the country. The crackdown also presented mining firms located in other countries to increase their market share such as U.S. firm Compute North, which recently revealed plans to increase its Bitcoin mining colocation capacity by more than 10-fold over the next 12 months.
Compute North CEO Dave Perrill said that it will increase its BTC mining collocation capacity by 1.2 gigawatts, according to The Block. In crypto mining, collocation is where an owner of a mining rig pays for a data center to host the equipment.
At the moment, the company operates three crypto mining facilities located in Nebraska, South Dakota, and Texas. Combined, the three locations’ capacity is over 100 megawatts.
Perrill said that the Minnesota-headquartered company now has five sites under construction. While he declined to disclose the locations of the new facilities, he revealed that they will be operational by the end of the second quarter next year.
The new facilities will be powered by a combination of fossil fuel and renewable sources. “At that scale, it'd be a challenge, if not impossible, to be 100% renewable,” the CEO said.
With the Chinese government shutting down Bitcoin mining farms in the country, the market is flooded with secondhand mining rigs. While some owners are liquidating their equipment, some are also scouting for collocation firms outside the country with available hosting capacity.
In fact, Compute North has been receiving inquiries on hosting capacity. “We were receiving requests for 100 megawatts on average over the past several weeks although some of them may be duplicated through brokers,” Perrill said.
Chinese miners have turned to collocation providers in Kazahkstan, Russia, and North America to relocate their operations. However, it will likely take several months for things to normalize as available hosting capacity outside China is not likely to meet the demand.
“We may not see the hash rate go back to the all-time-high level until Q2/Q3 next year. That's my hunch,” Perrill said. He added that Compute North have shifted from buying its own machines to building up its hosting capacity to meet this demand.
