How China’s crackdown on Bitcoin is giving U.S. miners more opportunities

Don Vo, VBit Technologies CEO joins Yahoo Finance Live to discuss China's crypto crackdown, Elon Musk's crypto motives and what's next for Bitcoin.

Video Transcript

MYLES UDLAND: All right, welcome back to Yahoo Finance Live. On this program, we talk a lot about the price of Bitcoin and other major cryptocurrencies. But we do not discuss too often the process behind actually continuing to build the blockchain itself, the mining process that creates digital Bitcoin, digital Ether, so on, so forth.

Joining us now to talk a little bit more about what the mining space is up to right now, the outlook for miners-- and we'll get into some of the environmental concerns as well-- is Don Vo. He's the CEO at VBit Technologies. Don, thanks so much for jumping on the show this morning.

So let's start with-- let's actually start with what Elon Musk said a few weeks back, and it really started, from my vantage point, kind of outside the crypto space. One of the big internecine fights that I have seen which is, is crypto mining environmentally friendly or unfriendly?

And as someone who is operating, you know, mining-- I guess outposting-- just kind of warehouses of a sort-- where do you come down on that issue? And how do you answer, I guess, that kind of question from folks that certainly have it for you?

DON VO: Well, actually, what I see is I think Elon Musk is wrong, or maybe he's just setting up, like, a story for his front and his future endeavors into the Bitcoin mining space. But the truth-- the reality is most Bitcoin mining data centers are actually using renewable energy. Like VBit's data centers, we're using hydroelectric power. most of the mines in China, of course, there are some mines that are still using coal power, but a lot of them are using hydro, a lot of them are using solar energy, which are all renewables. And I will say right now, more than 50% of the Bitcoin mining energy that is being used is already green energy.

BRIAN SOZZI: Don, so, if that's the case, should Elon Musk continue to have the influence that he does over Bitcoin and the rest of the crypto space?

DON VO: Well, honestly, right now, the crypto space is still a very new industry. So it's very misunderstood by a lot of different people. And Elon Musk being, like, trading spots, being the richest guy in the world between Elon Musk and Bezos, he's going to carry that type of influence on his following on a lot of different people that doesn't really understand the space.

I think over time when it becomes a more established industry, a lot of people are going to realize that, OK, there's more to this story. I have to do my own due diligence and I think cream always rises to the top. And the crypto space is here to stay and is going to solidify itself in the near future.

MYLES UDLAND: Now, Don, in your world, in the mining world, most of the news in the last couple of weeks has been out of China and their crackdown on some of those mining operations. Your argument, at least in the notes you sent over to us, is that this is a positive for you and your mining operations here domestically in the US. I guess, could you sketch out for us why the industry or why so many initially saw China's crackdown as a negative, and then sort of how you're seeing it on the other side of that coin.

DON VO: Well, actually, before the crackdown, over 65% of Bitcoin mining has been done in China. And I think China has made a really big mistake by banning Bitcoin mining or cracking down on the Bitcoin mining space, because they're going to be losing out on billions of dollars worth of revenue in that space for their country.

And they're driving those miners-- they're not really shutting down the mines. What they're doing is they're just driving those mines into other countries, and then giving away those revenues to other countries in forms of job creation for infrastructure building and also increased profits in the Bitcoin mining space in general. So right now, with the hash rate coming down and decreasing, we're expected to get another over 20% decrease in the mining difficulty level in the next adjustment in a few days here, which means that miners outside of China are going to be making over 20% more on their operations.

So I think it's a really big mistake that China is driving all of this revenue away from their country. And also by driving it away, it's actually helping Bitcoin achieve that democratization, decentralization that Satoshi had initially envisioned, right?

Because there should be no country that owns more than 51% of the mining hash power, because that would put too much power into the government's hands of that country to potentially attack the network with a 51% attack. And being a communist country, it's more of a possibility for China.

But also what, like, this crackdown shows is Bitcoin is resilient. Not even a powerful country like China can shut down the Bitcoin network. They would simply just shift to another country and give other countries more opportunity to get a foothold on it.

BRIAN SOZZI: Sure. Don, the 30 seconds that we have left-- with the latest crypto winter we are, in fact, in, has your business taken a hit?

DON VO: Actually, with the mining difficulty level decrease and the increase in demand from the Chinese miners, our business has actually been increasing. Every single week now, we get at least five to six calls from Chinese mining groups that are trying to move hundreds of thousands of machines to co-locate with our data centers here in North America. So I see it as a positive for all mining operations outside of China.

MYLES UDLAND: All right, Don Vo, CEO of VBit Technologies-- Don, appreciate the time this morning. Thanks for walking us through some of the dynamics we're seeing in the mining space. Appreciate the time.