Completing cryptographic problems on the blockchain grows in complexity by the day, necessitating the development of high-tech miners . Still, one or two computers are not enough to complete profitable mining. Thus, miners have to combine several Graphic Processing Units (GPUs) to create rigs that can translate to profits. However, these requirements necessitate a great deal of electricity consumption in powering computers as well as cooling as a lot of heat is produced in the process.
Access to Cheap Energy
It therefore means that for one to successfully mine cryptocurrencies for profit, one must have access to cheap electricity to ensure overhead costs do not surpass income. It is for this reason that Japan has become a suitable location for crypto mining. Availability of cheap electricity from geothermal, wind and hydro puts electricity costs lower than in most of the global countries. Additionally, Japan’s self sufficiency rate of electricity is notably high.
This is coupled with Japan’s crypto friendly government. Japan is on the frontline developing frameworks to manage cryptocurrencies. It seeks to find a mid ground between maintaining security while at the same encouraging innovation. Whereas in many countries, crypto mining either faces strict and stern stands from governments or operates with almost no notice and attracts no interest in the government, Japan strikes a balance.
Japanese Mining Farms
Several companies have as a result set up crypto mining farms in Japan. The latest entrant is Alt Designs who took over a former lace factory in Fukui setting up 500 servers in a space that could fit three tennis courts. The owner, Yuta Funayama, is a former employee of a Japanese Megabank and major securities trading house.
The choice of the location is informed by the fact that electricity is cheaper in Fukui than other viable locations such as Tokyo. The city of Fukui, additionally, has a subsidy that caters for half rent in unused factory spaces. These combined factors put Alt Designs and other potential miners at a good position to realize vast profits.
Crypto mining is not a preserve for those who have been in the financial sector only. The entertainment giant DMM also set up its mining operation in Kanazawa. With a 500 sq meters rig and a showroom, the firm intends to expand overseas in the near future. DMM mines several profitable coins. Among them are Litecoin, Bitcoin and Ethereum.
DMM’s mining farm in Kanazawa City, Ishikawa Prefecture, Japan. Image from Bitcoin.com
Another notable rig belongs to Miner Garage. The farm set up in Northern Japan in the Kazuno city of Akita Prefecture, rakes in up to 300 million yen per year from 600 computers. The favorable island climate combined with cheap electricity with a self sufficiency of up to 300% cuts down operational costs.
GMO internet, the first bitcoin miner developer in Japan also has a rig in the company. GMO recently announced release of its B3 miner that optimizes electricity use depending on the environment it operates in. The B2 upgrade is set to increase the profits in mining. SBI holdings, the self styled ‘ever evolving strategic business innovator’, also has mines in the country.