Bangkok – When China shut down its massive crypto mines, Thai entrepreneur Pongsakorn Tongtaveenan was ready to pounce, buying up redundant computer processors and shipping them to Southeast Asia.
According to Pongsakorn, Chinese miners sold their machines, bringing down the price by 30%.
Prices For New Miners
Prices for new “miners” – computer hardware that solves complex math puzzles to release Bitcoin rewards from the network – have risen to over $13,000 again.
Despite this, Pongsakorn, 30, has sold hundreds of units across Thailand as small businesses rush into the lucrative cryptocurrency market.
According to Beijing, cryptocurrency trading and mining are “breeding illegal and criminal activities” and endangering the “economy and financial order”.
In response to the crackdown, some of the world’s largest Bitcoin mining operations have sought out new bases with friendly regulations and abundant cheap electricity.
The biggest shifted operations to the US – particularly Texas – Malaysia, Russia, and Kazakhstan.
Many smaller miners, fearing the wrath of China’s authoritarian government, prioritized recovering money from their now useless computers.
That opened the door for entrepreneurs like Pongsakorn to transport unwanted equipment – mostly Bitmain Antminer SJ19 Pro – from Shenzhen to Thailand.
“Bitcoin is the digital gold. “But a mining rig pays dividends based on the gold price,” he said.
Pongsakorn’s rigs have fueled a cottage industry of miners across Thailand, earning each $30-40 daily.
“Roughly 100,000 Thai miners now,” he said.
Investors believe of Digital Assests
Investors who believe in the future of digital assets are among their number.
“We were ecstatic when China banned crypto,” one Bitcoin enthusiast turned miner told Al Jazeera.
He set up a rig for around 1 million baht ($30,000).
An unnamed miner said he recovered his investment in three months.
Many big Thai investors are keeping an eye on neighboring Laos, which is openly embracing cryptocurrency.
According to a 2020 study by internet and social media analysts We Are Social and Hootsuite, the 7.2 million-person country has a 43% internet penetration rate.
But it has dozens of mega-dams that generate cheap electricity.
“More than 95% of electricity produced is exported, so any surplus must be used,” an anonymous Laos crypto expert told Al Jazeera.
“They see a way to turn that excess into millions.”
In November, the communist government granted crypto mining and trading licenses to six large Laotian firms.
A $5m surety is required to start trading crypto, and mining operations must buy around $1m of electricity from the Laotian state grid per year, plus a large operating fee.
“Laos is hampered by geography and a lack of human capital,” said David Tuck of Bangkok-based Lyriant Advisory.
“It is desperate for revenue and has few options.”
Moreover, Laos’ debt-financed mega-dams supply electricity to neighbours like Thailand, whose reliance on imported power is dwindling.
“New domestic demand would be welcome,” Tuck said.
But Chinese miners who crossed the border to use cheap Laotian electricity would still be within easy reach of Beijing.
“In China’s backyard,” Tuck said.
Crypto States’ Enemy
Observers worry that the crypto gains will go to a few connected firms. The crypto regulations in Laos favor “a very small group,” said the expert. Laos public, Laos consumers not allowed access.
Despite the trend of small-scale investors piggybacking on leftover Chinese mining units, the wealthy in Thailand are crafting the rules of the larger crypto game.
Thailand’s oldest bank, Siam Commercial Bank (SCB), bought 51% of BitKub, Thailand’s largest crypto exchange, for $537 million last November. S.C.B. owned by King Maha Vajiralongkorn.
After years of lobbying, Thailand’s central bank finally approved the use of digital currencies for trading.
Thai crypto enthusiasts see BitKub as an attempt to centralise a formerly decentralized financial system.
A miner who requested anonymity said that while Bitcoin intended to be the ‘enemy of states,’ the wealthy have seized control. Then jump on board if you can’t fight it.