Bitcoin mining, the computing process that makes transactions with the cryptocurrency possible, is about to become more expensive for some after China ordered mining facilities to close.
ViaBTC Technology Ltd., which runs the fourth-biggest bitcoin mining collective, is raising maintenance fees for some of its clients Friday to 50 percent from 6 percent, according to a statement posted on its website today.
“Some of our long-term hosting partners are facing a crisis of farm closure as mining resources in mainland China become more scarce, leading to rocketing costs of our cloud mining operation,” the statement said. “To guarantee the long run of cloud mining, ViaBTC has no choice but have to readjust our maintenance fees.”
Chinese officials have reportedly asked local governments to guide miners toward an “orderly” exit from the business, and ViaBTC has moved operations to Iceland and America as a result. The move from Chinese regulators will change the bitcoin mining landscape as operations based in the country are starting to shift elsewhere. The relative profitability of the operations may hinge on how electricity costs compare to those in China, where rates are subsidized.
The company, which allows customers to purchase mining power from hardware in their data centers, is raising fees for owners of its S9 contracts, which uses the S9 Antminer hardware, “the most advanced and power-efficient bitcoin mining rig,” according to its website.
Transactions on the bitcoin blockchain are verified and recorded after computers compete to solve complicated mathematical problems, which require huge amounts of energy. The computer that solves the problem is rewarded with bitcoin, a process known as mining.