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Technicians make repairs to bitcoin mining machines at a mining facility operated by Bitmain in Ordos, Inner Mongolia, China, on Friday, Aug. 11, 2017.
Qilai Shen | Bloomberg | Getty Images

China has long been home to more than half the world’s bitcoin miners, but now, Beijing wants them out ASAP. 

In May, the government called for a severe crackdown on bitcoin mining and trading, setting off what’s being dubbed in crypto circles as “the great mining migration.” This exodus is underway now, and it could be a game changer for Texas.

Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens. 

Despite a lack of reserves that caused days-long blackouts last winter, Texas often has some of the world’s lowest energy prices, and its share of renewables is growing over time, with 20% of its power coming from wind as of 2019. It has a deregulated power grid that lets customers choose between power providers, and crucially, its political leaders are very pro-crypto – dream conditions for a miner looking for a kind welcome and cheap energy sources.

“You are going to see a dramatic shift over the next few months,” said Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini. “We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible.”

China’s mining dominance

2021 data for the global distribution of mining power is not yet available, but past estimates have shown that 65% to 75% of the world’s bitcoin mining happened in China – mostly in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan, and Yunnan. Sichuan and Yunnan’s hydropower make them renewable energy meccas, while Xinjiang and Inner Mongolia are home to many of China’s coal plants. 

The drawdown in miners has already begun in Inner Mongolia. After failing to meet Beijing’s climate targets, province leaders decided to give bitcoin miners two months to clear out, explicitly blaming its energy misses on crypto mines. 

Castle Island Ventures founding partner Nic Carter says that while it’s not totally clear how China will handle next steps, it a phased rollout is likely. “It seems like we’re going from policy statement to actual implementation in relatively short order,” he said.

The way this exodus is measured is by looking at hashrate, an industry term used to describe the computing power of all miners in the bitcoin network.

“Given the drop in hashrate, it appears likely that installations are being turned off throughout the country,” continued Carter, who also thinks that probably 50 to 60% of bitcoin’s entire hashrate will ultimately leave China. 

Although China’s announcement hasn’t been cemented in policy, that isn’t stopping miners like Alejandro De La Torre from cutting their losses and making an exit.

“We do not want to face every single year, some sort of new ban coming in China,” said De La Torre, vice president of Hong Kong-headquartered mining pool, Poolin. “So we’re trying to diversify our global mining hashrate, and that’s why we are moving to the United States and to Canada.”

One of bitcoin’s greatest features is that it is totally location agnostic. Miners only require an internet connection, unlike other industries that must be relatively close to their end users. 

“The cool thing about bitcoin that is under appreciated by a lot of the naysayers is that it’s a portable market; you can bring it right to the source of energy,” explained Steve Barbour, founder of Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities.

That said, the exodus won’t be instantaneous, in part, because it will take miners some time to either move their machines out of China or liquidate their assets and set up shop elsewhere. 

Where they’re going

Because miners at scale compete in a low-margin industry, where their only variable cost is typically energy, they are incentivized to migrate to the world’s cheapest sources of power. 

“Every Western mining host I know has had their phones ringing off the hook,” said Carter. “Chinese miners or miners that were domiciled in China are looking to Central Asia, Eastern Europe, the U.S., and Northern Europe.”

One likely destination is China’s next-door neighbor, Kazakhstan. The country’s coal mines provide a cheap and abundant energy supply. It also helps that Kazakhstan has a more lax attitude to building, which bodes well for miners who need to construct physical installations in a short period of time. 

Didar Bekbauov runs Xive, a company that provides hosting services to international miners. Xive also sells the specialized equipment needed for mining. 

Bekbauov says that he’s stopped counting the number of Chinese miners who have called him to ask about relocation options, ranging from operations with 15 rigs to thousands. 

“One miner told us that only government electricity plants have restricted mining and private ones will continue to service miners,” Bekbauov told CNBC. 

“But most of the electricity is generated by government power plants, so miners will have to move. That makes them uncertain and desperate to find other locations,” he said.

Whether Kazakhstan is a destination or simply a stopover on a longer migration west remains to be seen. 

Arvanaghi is bullish on North America and thinks the hashrate there will grow over the next few months.

“Texas not only has the cheapest electricity in the U.S. but some of the cheapest in the globe,” he said. “It’s also very easy to start up a mining company…if you have $30 million, $40 million, you can be a premier miner in the United States.”

Wyoming has also trended toward being pro-bitcoin and could be another mining destination, according to Arvanaghi.

There are, however, a few major limitations to the U.S. becoming a global mining destination.

For one, the lead time to build the actual physical infrastructure necessary to host miners is likely six to nine months, Carter told CNBC. “The U.S. probably can’t be as nimble as other countries in terms of onshoring these stray miners,” he said.

The move logistics may also prove difficult. There is a shipping container shortage, thanks to the tailwinds of the Covid pandemic. 

But perhaps the biggest question is the reliability of the Texas power grid. A storm that devastated large swaths of the state in 2020 has reignited a debate over whether Texas should winter-proof its systems, a potentially costly project that might affect taxes or other fees for those looking to tap into the state’s power grid. More recently, ERCOT, the organization that operates Texas’ grid, asked consumers to conserve energy amid what officials called an unusual number of “forced generation outages” and an upcoming heat wave.

Answering the Musk critique

Tesla CEO Elon Musk has bashed bitcoin mining, claiming that it is bad for the environment. It’s not a new criticism.

For years, skeptics have maligned the world’s most popular digital token for polluting the planet, while supporters have extolled the virtues of bitcoin and its role in accelerating the rise of renewable energy. 

It is unclear whether the China mining exodus will make or break the case for bitcoin enthusiasts in the debate around the token’s carbon footprint. The dominant narrative, to date, has been that much of the world’s bitcoin is mined with Chinese goal. 

“From a narrative perspective, it’s definitely an improvement,” said Carter. “But China also has the most abundant stranded hydro resources in the world.”

The country offers significant energy vectors from wind, solar, and especially hydropower in the south. Xinjiang’s grid, for example, is 35% powered by wind and solar energy inputs.

If all the miners do end up leaving China, it will mean less fossil fuel-powered mining, but it will also mean that the network’s share of renewable energy-powered mining will drop. This is why the question of where these migrant miners end up could prove critical to bitcoin’s future. “It’s the biggest story of the year for bitcoin,” said Carter. 

De La Torre says they’re looking to expand operations using green energy, a trend that is already years in the making. He says that hydro plants are generally cheaper than fossil fuels in most parts of the world.

“Mining is price sensitive, so as to seek out the lowest cost power and the lowest cost power tends to be renewable because if you’re burning fossil fuels…it has extraction, refinement, and transport costs,” explained Blockstream CEO Adam Back. 

Lazard

Each year, investment bank Lazard releases a breakdown of energy costs by source. Its 2020 report shows that many of the most common renewable energy sources are either equal to or less expensive than conventional energy sources like coal and gas. And the cost of renewable power keeps going down.

But there are limitations to running crypto mines purely on renewable energy.

Though solar and wind are now the world’s least expensive energy sources, both power supplies face limitations at scale, so there is concern over the viability of miners turning exclusively to wind or solar energy.

Next six months

For the time being, there isn’t that much mining capacity worldwide that is ready to absorb the Chinese miner diaspora. While they scramble to find a new home, we could see hashrate go offline – and stay offline. 

In practice, that would mean all the remaining miners are more profitable for a period of time. 

Having more geographic dispersion would even out the global balance of power, and it would also reduce the ability of any one sovereign nation to co-opt or control the network.

We may also see special crypto economic zones pop up in the next few months.

“You will see jurisdictions adopting a very favorable stance and creating the equivalent of special zones to encourage miners to host locally,” said Carter. “We’re seeing it at the state level here. You’re also gonna see it at the country level, you might even see subsidized electricity for mining.”

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The Kia EV5 is now on sale as one of Canada’s most affordable electric SUVs

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The Kia EV5 is now on sale as one of Canada's most affordable electric SUVs

Kia now has one of the most affordable electric SUVs in Canada. The EV5 is now on sale, starting at $43,495 CAD.

Kia opens EV5 orders in Canada

The EV5 is the electric SUV we want in the US, but we will likely never see it. After opening online orders on December 4, Kia revealed prices for the entire 2027 EV5 lineup.

Surprisingly, buyers can choose from nine trims, with prices ranging from $43,495 CAD for the base Light model to $61,495 CAD for the flagship AWD GT-Line Limited edition.

Outside of the Light trim, all EV5 variants are offered with front-wheel or all-wheel drive. Upgrading to AWD costs an extra $2,500 CAD.

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Likewise, all EV5 trims, except the Light variant, are powered by an 81.4 kWh battery, providing up to 460 km (285 miles) of driving range. The entry-level Light uses a 60.4 kWh battery, good for a driving range of up to 335 km (208 miles).

All EV5 models come with a built-in NACS port, nearly 30″ of screen space in a curved panoramic display, heated front seats, and Kia Connect with OTA updates.

The interior features Kia’s new Connect Car Navigation (CCNC) infotainment system with dual 12.3″ driver display and touchscreen navigation screens, plus a 5″ climate control screen. The setup includes wireless Android Auto and Apple CarPlay capabilities.

Kia grouped the EV5 trims into tiers based on what buyers are looking for. As expected, the Light FWD trim is the best value for your money.

For those looking for a little more driving range, the Wind FWD offers up to 460 km range, while the Wind AWD is built for Canada’s harsh winters. Both include a heat pump as standard.

Kia-EV5-prices-Canada
The Kia EV5 (Source: Kia)

2027 Kia EV5 prices and range by trim

Kia said the EV5 Land Rover trim is the best option if you’re looking for a little more out of the interior. The Land Rover trim adds a memory function to the driver’s seat, a heated steering wheel, a panoramic sunroof, a smart power tailgate, and 19″ wheels.

And then there’s the EV5 GT-Line, for those looking for added performance, a sporty new look inside and out, and driver-assistance features like lane-change assist.

2027 Kia EV5 trim Starting Price (CAD) (FWD/AWD) Battery Target Range (FWD/ AWD) Selling Points
Light traction $43,495 60.4 kWh 335 km Entry-level price, standard battery life
Wind $47,495 / $49,995 81.4 kWh 460 km / 415 km Long-life battery, heat pump
Land $49,995 / $52,495 81.4 kWh 460 km / 415 km Panoramic roof, smart tailgate, V2L
GT-Line $55,495 / $57,995 81.4 kWh 460 km / 410 km HDA2, FCA 2, ventilated seats, sporty style
GT-Line Limited $58,995 / $61,495 81.4 kWh 460 km / 410 km Head-up display, RSPA 2, Harman Kardon, digital key
Kia EV5 prices and range by trim in Canada

The EV5 is now available to order in Canada, outside of the entry-level FWD Light variant, which is scheduled for the fourth quarter of 2026.

Despite the wait, Kia claimed the 2027 EV5 is going on sale as “Canada’s most affordable electric SUV,” starting $43,495.

For those in the US, don’t get your hopes up. Kia said the EV5 will be sold exclusively in Canada for the North American market.

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If you think Trump will bring tiny kei cars to the US, you might be as dumb as he is

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If you think Trump will bring tiny kei cars to the US, you might be as dumb as he is

Multiple outlets are reporting on Donald Trump’s apparent effort to change US regulations to bring tiny Japanese kei cars to the US, but there’s little reason to think that effort will be serious.

Convicted felon Donald Trump has directed former reality TV contestant Sean Duffy to examine how kei cars, a category of Japanese microcars, could be brought to the US, calling them “cute.”

The statement was made yesterday at the announcement of a fuel efficiency rollback, which will raise your fuel costs by $23 billion and is explicitly intended to make cars bigger and less efficient.

And so, simply by reading the preceding two sentences, you should understand how unserious this effort is. At the same moment that a new proposal was announced to reduce fuel efficiency targets by a third, the same person who is trying to increase your fuel costs and make cars bigger and less efficient apparently also wants tiny efficient vehicles in the US. How does that make sense?

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If Trump did know anything about how the auto industry works, he would not speak about making cars smaller at an event to announce rules explicitly intended towards making cars bigger – these are not compatible thoughts, and betray a lack of understanding of the reason he was even in the room to begin with.

Further, in addition to yesterday’s effort to remove CAFE rules, the EPA is currently trying to roll back President Biden’s improved exhaust standards which included a recognition of vehicle sizes becoming too large and a desire to reduce SUV/truck market share, and Mr. Trump is trying to place a 15% tariff on all Japanese goods, meaning higher prices for Americans if these cars were to come to the US.

Thinking more deeply about the reason why Mr. Trump might have mentioned kei cars to begin with, it is likely related to his recent trip to Japan. He went to Japan to negotiate an end to the unwise tariffs that he himself announced on one of America’s closest trading partners (despite that he does not have the Constitutional authority to apply them).

During that trip, he seems to have seen the tiny cars for the first time (or the first time he can remember, given his senility), and been enamored by them. So, he said yesterday (while flanked by Duffy, who showed apparent surprise as the flippant statement came out of his mouth):

“They’re very small, they’re really cute, and I said ‘How would that do in this country?’… But we’re not allowed to make them in this country and I think you’re gonna do very well with those cars, so we’re gonna approve those cars.”

-Donald Trump, upon witnessing a type of vehicle he should have known of by now, having spent 79 years globetrotting around this Earth, so how can he just be seeing this for the first time except if he’s senile.

Now, technically, here he says he wants the US to build the cars here, rather than import them from Japan. Kei cars are very popular in Japan, but rarer in other countries. Some other countries do have their own small cars similar to kei cars (for example, China’s 115-inch Wuling Mini EV), but Japan is where these vehicles have traditionally held the highest share.

GM's-top-selling-EV-China
New Wuling Hongguang Mini EV (Source: China’s MIIT)

There are various reasons for this, but one of them is due to the high density of Japanese cities. Kei cars are very space efficient for cities that are obsessed with space efficiency in a way that simply is not the case in the US.

Japanese cities are also connected by efficient, fast and reasonably-priced bullet trains, so getting from one side of the country to the other is easy to do without having to stuff the whole family into a vehicle that is under 134 inches long. And the regulatory regime in Japan has been built around kei cars, giving them certain advantages to incentivize their use.

mitsubishi electric kei car
Mitsubishi eK X EV

Meanwhile, it’s nigh-impossible to convince any manufacturer to even build a sedan, hatchback or small SUV for the US, or to build any small-displacement vehicle. So this would require a massive change in consumer tastes, which of course manufacturers haven’t been particularly interested in leading, given they’ve been pushing SUVs for decades now.

That said, one of the reasons manufacturers have pushed SUVs is due to regulations which treat them more favorably than smaller vehicles. If those regulations were changed – and that’s what Trump and Duffy have floated – it could open the doors for smaller cars.

But there’s little reason to think either of them are serious about this, given the amount of work that would have to be done to change regulations, and given the work they’re currently doing to change the regulations in the exact opposite direction.

At a minimum, Federal Motor Vehicle Safety Standards (FMVSS) would have to change significantly. This is the set of rules governing safety requirements for all motor vehicles, with requirements for various vehicle classes that have been built and tweaked over time. And these requirements are tailored to how we build roads, infrastructure, and signage in this country, which differs from how these things are done in Japan or Europe or China.

While an effort to harmonize FMVSS and infrastructure standards with other countries would be admirable and has been desired for a long time in the auto industry, the enormity of the undertaking is much greater than a single flippant comment (from someone who probably doesn’t even know what FMVSS stands for).

And in fact, US regulations already do allow for exemptions to many regulations for low volume vehicles. So it already is possible to build small cars in the US, at least if you build fewer than 2,500 per year. So a startup focused on tiny cars could already get started here, and could have been selling kei-like cars all along (say, TELO, for example… but even they are offering a 152in truck, a foot and a half longer than a kei car, and with 500hp, about 8x more than a kei car).

TELO’s tiny truck next to a full size Dodge RAM

But why haven’t manufacturers made these cars already, then?

Again, going back to the above, regulations and manufacturers have both pushed vehicle sizes larger and larger, and consumer tastes have happily followed, with US drivers wasting more and more money and space on larger and more polluting vehicles.

There is a perception that these larger vehicles are safer (even though they aren’t, and we are currently nearing an all-time high in pedestrian fatalities), so if vehicles keep getting bigger as a result of regulations allowing them to, US consumers will be afraid to buy a car that’s even smaller than the smallest available today. And yesterday’s proposed rule explicitly claims, in its third paragraph, that smaller cars are undesirable for this reason (without recognizing that it’s actually the larger cars that are responsible this problem).

Kei cars are also typically less powerful than the average American car, which even Duffy claimed himself, saying “are they going to work on the freeways? Probably not” (even though most vehicles use about ~20hp to sustain highway speeds).

And given that the American consumer has been sold the dream of buying a vehicle not for what it will be used for, but for every conceivable purpose they could ever dream of using any vehicle for, it seems unlikely that many will line up for a car that they have been told can’t even get on the freeway.

After all, Smart cars did exist in the US, as have various other small vehicles, but they’ve always been marginalized, because the whole culture, manufacturing base and regulatory regime around cars and roads has been built to advantage large vehicles, not small ones.

So despite that microcar enthusiasts like myself want to see tiny cars in the US, the idea that manufacturers will suddenly scale up production of these vehicles in the US seems extremely unlikely without a concerted effort to show that they are welcome here and that there will be a market for them.

And I’m not convinced that concerted effort will be undertaken by people who are currently undertaking a concerted effort to do the exact opposite, and by someone who seems to change his mind with whatever stupid nonsense he happened to see 12 seconds ago on fox. Companies don’t build manufacturing facilities based on the whims of an idiot, they do so with clear and consistent policy that they can be certain will last through a vehicle model’s development and sales timeline (typically around ~14 years from start of development to end of production).

So I don’t think this is going to happen. Prove me wrong, I will be happy to eat crow here.


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Northern California’s largest non-Tesla fast charging hub is now online

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Northern California's largest non-Tesla fast charging hub is now online

Not-for-profit public power provider Ava Community Energy just brought its first EV fast-charging station online in downtown Oakland, California, and it’s a big one.

The new site features 18 Kempower DC fast chargers, making it the largest non-Tesla fast-charging hub in Northern California. The majority of the plugs are CCS, with a few NACS and one ChAdeMO plug. It’s near workplaces, housing, and close to the freeway for commuters.

The station is inside Oakland City Center West Garage, right in one of the region’s busiest urban neighborhoods. Nearly half of Alameda County’s residents are renters, so public fast charging is an essential service for EV drivers who can’t plug in at home. Ava says this is the first step in building a network of up to 15 stations focused on expanding equitable access to EV charging.

The new charging hub also lines up with Oakland’s 2030 Equitable Climate Action Plan, which puts frontline communities at the center of the city’s climate strategy. A big part of that plan is giving residents the infrastructure they need to switch to EVs, and supporting current EV drivers with stations that are reliable, accessible, and community-focused.

“Our goal is to expand access to clean, sustainable energy in large and small ways through increased usage of solar systems, more electric transportation via cars and electric bikes, which reduces tailpipe emissions, improving how people cook at home, and even how we heat our homes and water,” said Howard Chang, Ava Community Energy CEO. “Ava Charge is just one step in our overall goal to make the transition to carbon-free energy easier for all.”

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Ava partnered with San Francisco-based EV Realty to bring the project to life. EV Realty handled engineering, procurement, and construction, and will run and maintain the site.

Read more: Wallbox pushes new wave of EV chargers across the Mountain West


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