Bangkok, Thailand- The moment the ax fell into China’s huge crypto mine, Thai entrepreneur Pongsakorn Tongtaveenan was ready to raid – the redundant computer processor needed to get Bitcoin from the network and ship it to Southeast Asia. I bought it quickly.
“Chinese miners have removed their machines and prices have fallen by 30 percent,” Pongsakorn told Al Jazeera.
The price of the new “minor” has returned to over $ 13,000. This is computer hardware that solves complex math puzzles that free Bitcoin rewards from the network.
Still, 30-year-old Pongsakorn was able to sell hundreds of units across Thailand as China cracked down on lucrative markets and small players jumped into cryptocurrencies.
In September, Beijing banned all cryptocurrency trading and mining, amid concerns that cryptocurrencies “breed illegal and criminal acts” and pose risks to “economic and financial order.”
The crackdown has forced some of the world’s largest Bitcoin mining businesses to look for new bases with friendly regulations and the essential elements of cheap electricity to run thousands of computers 24 hours a day. I did.
The largest packing and shifted businesses have been moved to the United States, especially Texas, Malaysia, Russia and Kazakhstan, among other countries.
But for many small miners who are eager to cut down and run quickly for fear of causing the wrath of China’s authoritarian government, the priority is to get some money back to the now useless computer. was.
It has created an opportunity for entrepreneurs like Pongsakorn who had unwanted gear (mainly Bitmain Antminer SJ19 Pro) in their hands, from Shenzhen to Thailand.
“Bitcoin is the gold of the digital world. But mining rigs are like mining stocks of gold. Dividends are paid according to the price of gold,” he said.
Pongsakorn’s rigs fuel the cottage industry for miners across Thailand, where each miner can earn $ 30-40 a day from each machine in operation.
“Currently, there are about 100,000 Thai miners,” he said.
Their ranks include investors who believe in the future of digital assets, as well as those who pursue a stable income during a pandemic.
“The moment China banned cryptocurrencies, we were ecstatic,” one Bitcoin enthusiast running a small PV processor in a garage in eastern Thailand told miners. became.
He put the rig up and running with an initial cost of about 1 million baht ($ 30,000).
“I got everything back in three months,” said a miner who asked to remain anonymous.
Many larger Thai investors are closely watching neighboring Laos, which is implicitly embracing the rise of cryptocurrencies.
According to a 2020 survey by Internet and social media analysts We Are Social and Hootsuite, the Internet penetration rate of 7.2 million poor, officially communist countries is only 43%.
But the advantage is the abundance of cheap electricity generated by dozens of megadams.
“More than 95% of the electricity produced is for export, so the surplus must be used, otherwise it would be a huge waste for the government,” a Laotian cryptographic expert asked for anonymity. I told Al Jazeera.
“They see the opportunity to convert that excess into millions of dollars.”
In November, the Communist Party government began mining and trading cryptocurrencies by licensing six large, connected Lao companies.
The initial terms of the license include a $ 5 million guarantee for companies planning to trade cryptocurrencies, but the mining business buys about $ 1 million a year from the Laos National Grid and is a large amount. You need to sign up to pay for your operating expenses.
“Laos is plagued by geographical conditions and lack of human capital,” David Tuck, a partner at Bangkok-based risk consultancy Lyriant Advisory, told Al Jazeera.
“Government’s financial resources desperately need cash, and there are few options for generating income.”
Megadams in Laos are often debt-funded and produce electricity for neighboring countries, including Thailand, where the need for external electricity is diminishing.
“New demand from major domestic buyers is welcome,” said Tuck.
However, Chinese miners looking to slip through the southern border to connect cheap Laotian electricity have easy access to their close ally, Beijing.
“They will be working in the backyard of China,” Tuck said.
Some observers are afraid that crypto profits will come to just a handful of connected businesses. Regulations support “a very restricted group in Laos,” said a Laotian cryptographic regulation expert. “It is not open to the general public of Laos, consumers of Laos.”
In Thailand, one of Asia’s most unequal societies, it’s the rich who are making the rules for larger crypto games, even though small investors tend to piggyback on the rest of China’s mining units. is.
In November, Thailand’s oldest bank, Siam Commercial Bank (SCB), paid $ 537 million to buy a 51% stake in BitKub, Thailand’s largest cryptocurrency exchange. King Mahabaji Laronkon of Thailand owns 23 percent of the SCB.
With regulators finally making it easier for Thais to trade digital currencies, BitKub is trying to absorb the fees of millions of domestic customers with the ambition to become Southeast Asia’s largest trading platform.
For some Thai crypto enthusiasts, the advent of BitKub is seen as suspicious as an attempt to unify the former rebellious form of finance.
“The purpose of Bitcoin was to be a’national enemy’… but the rich took over,” said a miner who spoke on anonymous terms. “If you can’t fight it, you should just get in.”