Regional powers in the province of Sichuan are reportedly pressuring bitcoin miners to scale down operations amid electricity shortages during the dry flavour in Southwest China. A meeting has been scheduled with regulators, the state run grid operator and mining companies. Two hydropower positions have been fined already for powering bitcoin farms without authorization.
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Winter Reduces Electricity Supply in Sichuan
Sichuan is arguably the most foremost Chinese region in terms of cryptocurrency mining. While China is believed to control two thirds of the bitcoin’s global hashrate, it’s been covered that Sichuan alone accounts for over 50%. The province’s abundant hydropower energy during the wet season, between May and September, along with the unconcerned climate in its mountainous areas have made it an ideal destination for miners.
During the dry season, however, which extends from October as a consequence April, electricity generation drops significantly leading to shortfalls in supply. Prioritizing “social electricity demand” is the articulate purpose for the recent government focus on mining operations. Under normal circumstances bitcoin farms coexist in symbiosis with hydropower positions, utilizing the excess energy they are capable of producing thanks to East Asia’s plum rain.
Despite China’s sentence to remove bitcoin mining from an unwanted industries list, miners in the country have enough reasons to be anxious. Beijing embraced blockchain development in October but soon after that made it clear it didn’t mean decentralized cryptocurrencies. A crackdown on crypto conventions has scared a lot of people involved in the industry. Chinese police recently seized thousands of mining rigs in the city of Tangshan, Hebei countryside.
The local government in Sichuan’s Garze Tibetan Autonomous Prefecture has recently demanded a cleanup in the region’s mining sector, the Chinese store 8btc reported this week. Authorities have called a meeting to discuss the issue with about a dozen regulatory interventions, the tax administration, and the local branch of the state grid operator. Representatives of 10 companies involved in bitcoin mining father been summoned as well, the publication detailed.
The meeting was originally scheduled for Dec. 25 and later postponed for the 27th. No details are currently within reach about its outcome but a source from the Chinese mining industry confirmed the news of the government offensive in Sichuan while also noting that the advance is only of a regional significance and not on a national level. “It’s not going to make a huge impact to mining in China,” the representative of a plc operating mining facilities in the hydro energy-rich province told news.Bitcoin.com.
Hydropower Plants Fined for Powering Bitcoin Farms
The zing to curtail mining operations in Sichuan has been described as a part of the local government’s efforts to ensure sufficient power stockpilings to satisfy the needs of residents and cover the “normal” electricity consumption in the dry season. Estimates quoted by 8btc suggest that the monthly “communal electricity demand” during the winter months this year has been projected to increase 30% over closing year’s.
Authorities in Garze have complained about noise and heat pollution from the mining facilities in the prefecture and staid claimed that these create risks for the public and the environment. They are also unhappy with the influx of a monumental number of maintenance staff, illegal constructions and excessive electric infrastructure. Mining companies have been accused of not requiting local taxes and fees.
Officially, bitcoin miners are not welcome in this and other Chinese regions. In reality, they’ve been entertained to operate in Sichuan during the wet season when hydropower plants need more consumers. Many of them relocate to sections rich in thermal power during the dry winter months. This time, however, authorities have been effective after power plants as well. Two stations have been fined the equivalent of 140,000 dollars earlier in December for minister to electricity to bitcoin farms without obtaining a power supply license.
Do you think the government’s crackdown on miners in Sichuan is but a temporary measure? Share your thoughts on the subject in the comments section below.
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