Cryptocurrency Mining Startups Thrive In Rural Japan

Last Updated: July 7, 2018 at 11:45 AM EST
mining farm

Outside Tokyo, regions are experiencing a sudden increase in the number of cryptocurrency mining startups that are establishing themselves to do business there. This, because of some key factors that these provinces can offer in contrast with the conditions that Tokyo has offered them, according to an article published by Nikkei Asian Review.

Mining, as most people know, is an energy-intensive task, needed to make cryptocurrency transactions work as intended; and miners get rewarded with cryptocurrency by doing this task. So, one of the most important factors for miners to settle in a region is the cost of electricity; because the lowest it can get, the better the revenue rate of a mining startup will be. Outside-Tokyo regions offer just that: cheaper energy tariffs than the ones in Tokyo.

In the city of Fukui, a startup called Alt Desing has established to take advantage of these conditions. They provide cryptocurrency space leasing, that is, they rent the space in their facilities specially designed for mining purposes, and put clients machines there. For these operations, they collect a fee from the mined cryptocurrencies. While they face enormous heat from international operations, they present themselves as a good alternative for local miners who already have their equipment.

They have also taken advantage of a local law that halves the rent of officially registered businesses that move into abandoned or unused industrial factories, and they did just that; they rented a big unused factory and enjoy a relatively low rent pay for the amount of space they received. But they have also taken a hit because of the massive drop that cryptocurrency prices have experienced since last year’s December, a thing that has affected the revenue that they receive from their customers.

Japan has been one of the most cryptocurrency friendly countries, legalizing and recognizing these types of startups since years ago, a thing that only recently some of their neighboring countries like South Korea are just really starting to do.