Bitcoin miners are gearing up for a major hardware overhaul ahead of the impending halving, with reports stating that thousands of older machines in the U.S. will be shipped to countries like Ethiopia to capitalize on cost-effective mining environments.

According to Bloomberg, around 6,000 outdated bitcoin mining machines in the U.S. are slated to be temporarily idled and transported to a warehouse in Colorado Springs, where they will undergo refurbishment before being resold to international buyers seeking to optimize their mining operations in regions with lower electricity costs.

Operating out of a 3,251 square meter facility, wholesaler SunnySide Digital Inc is spearheading this initiative by receiving and revamping the older equipment from mining clients. This process is part of a larger-scale operation involving several hundred thousand machines gearing up for an upgrade coinciding with the upcoming quadrennial halving event in the bitcoin blockchain.

Scheduled for late next month, the halving event will see a reduction in the block reward, which serves as the primary revenue stream for miners. In response to this impending change, mining companies such as Marathon Digital Holdings Inc and Riot Platforms Inc are focusing on upgrading to the latest and most efficient technology to mitigate the impact on their profit margins.

SunnySide Digital chief executive officer Taras Kulyk, who has resold US computers to miners in countries such as Ethiopia, Tanzania, Paraguay, and Uruguay, called this move a “natural migration” with buyers of the old machines operating in parts of the world where power is the cheapest. “This is accelerated by the halving,” he added.

Ethan Vera, COO of Luxor Technology Corp in Seattle, highlighted that approximately 600,000 S19 series computers, a popular choice among miners, are being relocated from the U.S. to Africa and South America, where operating costs are more favorable.

As the halving event draws near, the urgency to deploy more efficient mining machines is increasing, as continued use of older equipment could lead to electricity costs surpassing mining revenue. Some miners in the U.S. are opting to transfer their hardware to regions with lower electricity costs and third-party data centers, recognizing the financial benefits of operating in more affordable environments.

While there are logistical challenges and risks involved in relocating mining equipment abroad, miners are persistently preparing for the halving by investing significant capital in upgrading their hardware.

Major public bitcoin-mining companies have collectively placed orders exceeding $1 billion for new machines over the past year, indicating a growing trend toward enhancing mining capabilities in anticipation of the upcoming reward reduction.

As we approach the halving, the bitcoin mining landscape is undergoing significant transformation as operators adapt to the evolving market conditions and seek out more cost-effective strategies to maintain profitability.