Japan's Finance Industry Embraces Bitcoin Mining
Japan’s major players in the financial industry are eyeing bitcoin mining with a goal of generating new revenue. They also hope to help set the ground rules for using bitcoin. In early September Japan’s GMO and DMM.com said they were moving into the mining space. Both companies have started crypto and bitcoin exchanges.
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An Asia Nikkei article summarized: “Some of the middlemen that cryptocurrencies were designed to cut out are getting into the virtual mining business. With Japanese eagerly buying into bitcoin and similar currencies, SBI Holdings, GMO Internet and other online securities companies hope to turn mining into a new revenue source.”
Kevin Helms, writing for news.Bitcoin.com, covered GMO’s foray into bitcoin mining last September when the company announced it. He said, “Japan’s leading internet conglomerate and bitcoin exchange operator GMO has announced that it is expanding into the businesses of bitcoin mining and chip manufacturing. The company revealed plans to produce and sell 7nm semiconductor chips and run a mining facility in Northern Europe.”
Why mining, why now?
With greater adoption and usage occurring in the bitcoin ecosystem, the mining rewards for bitcoin are also becoming extremely lucrative. However, an individual or organization must have a lot of dedicated resources to get involved. Currently, large mining pools are a necessary prerequisite to generating massive revenue. Combined, miners across the world collect $7.84 million a day.
According to Blockchain, a British startup, miners across the globe collectively make $7.84 million a day — 10 times more than two years ago.
This extra revenue has inspired Japan’s financial industry to secure some major mining pools. They are especially looking to maintain pools outside of Japan where electricity is cheaper. The Asia Nikkei article elaborated, saying, “But there’s the matter of keeping energy bills manageable. In August, SBI set up a new mining unit. The plan is to establish a mining base outside of Japan where electricity is cheap. Monex, meanwhile, plans to issue its own digital currency and to mine it.”
Furthermore, Japan is hoping to capitalize on China’s authoritarian rules. Since China banned ICOs and shuttered several exchanges, Japan has risen to the top in cryptocurrency and bitcoin trading. There are rumors circulating now that China might try to stamp out bitcoin mining, Japan likely sees this as an opportunity to capture a large chunk of the mining market.
Setting the Rules and Becoming a Dominant Player in the World of Bitcoin Mining
This market capture would also provide Japanese miners with a say in how the bitcoin protocol works. In other words, if they have a huge stake in mining, they will be able to influence some of the rules governing bitcoin. The site said, “Bitcoin is run by a dozen or so engineers, called core developers, who set rules for the currency. Miners also have a big say in this regard.”
With all the facts in perspective, it is no wonder why Japans large financial sector is looking to start mining heavily. Their timing appears to be impeccable, and they could very well secure a dominant position as a major player in bitcoin mining.
Do you think Japan will do well mining? Will their financial industry cut a large chunk of the profit? What do you think about the future of bitcoin mining? Let us know in the comments section below.
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