In May, the Chinese authorities banned mining in the country. Since then, the share of Russia in the bitcoin hash has increased from 7.2% to 11.2%. However, Chinese miners still generate 20% of the aggregate hash rate.
We spoke with Batyr Khydyrov, the founder and CEO of the company. Uminers, which is engaged in the supply of mining equipment around the world.
He spoke about the attitude of Chinese regulators towards miners, the impact of semiconductor shortages on the industry and the prospects for mining in Russia.
Cryplogger: Hello Batyr! Tell us about yourself. How did you get into the crypto industry?
Batyr Khydyrov: Hello! In 2017 in Uasia Group – parent company Uminers – there was a request for the supply of miners. These were Ibelinks, which served the Dash cryptocurrency network.
We were engaged in the export of goods from China. Mining seemed like something wild and incomprehensible. But it was this order that marked the beginning of the Uminers story.
I was always interested in new technologies, so I started looking for information about mining: equipment manufacturers, operating principles and technical features of ASIC devices.
By the end of the year, we had established contacts with the management of Bitmain and Whatsminer. In 2018, I went to Georgia for the World Digital Mining Summit (WDMS), where I met Jihan Wu, co-founder and then CEO of Bitmain. Thanks to this, I learned about the intricacies of the supply of miners from China.
Uminers is officially registered in Russia and operates in accordance with local laws. In addition, we have offices in China, USA and Canada.
Uminers is headquartered in Guangzhou, China. On December 10, we opened a subsidiary in Shenzhen to work closely with mining equipment manufacturers. Now we can process inquiries from the CIS more quickly, as well as focus on the markets of North America and Europe.
Cryplogger: Has the migration of miners from China affected your business?
Batyr Khydyrov: Supply volumes only increased: miners in other regions received increased rewards. There were also new market participants who were interested in mining and were waiting for a “signal to enter” this business.
On the other hand, after the May events, a large number of used equipment appeared. It is more difficult to get customers interested in new miners. We have to look for a middle ground between the hash rate of the device, its cost and the payback period.
Cryplogger: How do Chinese regulators view miners?
Batyr Khydyrov: Like parasites on the body of the state.
For a long time, the authorities turned a blind eye to the industry: they did not regulate and did not impose taxes. At the same time, Chinese miners accounted for more than half of the hashrate of all PoW cryptocurrencies. They consumed colossal amounts of cheap electricity without creating jobs or paying taxes.
The ban was obvious and imminent given the global energy crisis and the apparent power shortage in China.
I think the industry will return to China and with a 99% chance of being government-regulated. It is difficult to say when this will happen: it all depends on the situation in the global energy market and within the PRC.
Cryplogger: What miner manufacturers do you work with?
Batyr Khydyrov: Uminers works closely with MicroBT, one of the largest manufacturers of mining equipment, along with Canaan and Bitmain. We also have very warm partnerships with the latter.
Now our supply statistics looks like this:
- 50% – Bitmain;
- 40% – MicroBT;
- 10% – Canaan, GoldShell and others.
Let me emphasize that on the basis of these figures it is not worthwhile to draw a conclusion about the quality of the equipment produced: these are just the preferences of our customers.
Cryplogger: How has the shortage of semiconductors affected the cost of equipment?
Batyr Khydyrov: Almost all high-tech industries suffer from their scarcity. Mining is no exception.
The most expensive element of any ASIC is a computing chip. When mining bitcoin, the number of such chips in one device can reach up to 1000.
I can confidently say that prices for mining equipment will continue to rise. This is influenced by the constant race among manufacturers for hashrate and energy efficiency of devices, the global shortage in the semiconductor market and the 100% workload of chip manufacturers TSMC and Samsung.
Cryplogger: Tell us about the supply of miners to Russia and other countries.
Batyr Khydyrov: According to our estimates, the share Uminers accounts for 50% of supplies to the Russian market.
Here are some numbers: in 2021, we delivered over 60,000 devices to Russian customers and transported over 1,000 tons of mining equipment around the world.
Most of the Russian sellers work with us because it is convenient. Uminers provides a full range of services in this area: from ordering equipment in China to logistics and customs clearance.
Cryplogger: How long does it usually take to deliver miners?
Batyr Khydyrov: For medium and large orders – 10-15 days. These are the cases when the client needs from 50 to 1000 devices.
Retail buyers can get the miners right away: we keep up-to-date equipment in warehouses in the Russian Federation and China.
Uminers works closely with Binance. We were among the first to implement the Binance Pay payment system, with which you can make a purchase in a couple of clicks.
Cryplogger: Are your main clients from Russia?
Batyr Khydyrov: Yes, this is our main market. But this has its own difficulties: there is no infrastructure for mining, transparency in the purchase of electricity and the corresponding legislation.
We are now developing the North American direction. In the USA and Canada, there is a great demand for mining equipment: in these countries, the industry has long come out of the shadows.
Electricity is more expensive there, but the market is more protected in terms of legal and legal guarantees. Our US clients and partners see mining as a long-term investment. They are not expecting quick profits, but are investing in the future.
Cryplogger: How do you assess the prospects for mining in Russia?
Batyr Khydyrov: The cheap “socket” in Russia is over. The time has come to invest in infrastructure facilities. But this requires a legal foundation.
The future of Russian mining depends on regulators. With the right approach, our country has every chance of becoming an industry leader.
Subscribe to Cryplogger news in Twitter!
