China’s Bitcoin Mining Crackdown Reaches Fourth-Largest Producing Province

Over the weekend, Yunnan provincial authorities issued a notice ordering an investigation into the alleged illegal use of electrical power by individuals and companies involved in Bitcoin mining.

According to a report from the China Securities Journal, the provincial energy department threatened to cut power to those caught using electricity for crypto mining.

The SCMP reported that the authorities would also shut down any Bitcoin mining operations that may “pose a safety risk related to their electricity usage” by the end of June.

Yunnan Bitcoin Miners Going Dark

Yunnan ranks fourth in China in terms of BTC hashrate and joins other regions such as Inner Mongolia, Xinjiang, and Qinghai, which have also had notices to shut down part or all of the mining farms in their area.

Yunnan is the second-largest hydro-power-producing province in China after Sichuan, and much of the mining already uses renewable energy. However, that has not made a difference to Beijing’s ongoing war on cryptocurrencies.

Chinese Bitcoin operations are slowly closing down or relocating. Inner Mongolia started evicting miners in February and had shut down 35 Bitcoin mining companies by the end of April.

Authorities in Qinghai ordered BTC miners to shut down last week and also banned businesses like data centers, industrial parks, and power stations from providing crypto-related firms with land and power.

According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), China still controls around 65% of the global hash rate though its figures could be dated. Xinjiang alone accounts for nearly 36% of the total, with Sichuan and Inner Mongolia second and third, respectively. Yunnan ranks fourth, accounting for 5.4% of the global hash rate according to the SCMP.

China’s Dominance Diminishing

Other estimates from the industry journal Miner Daily suggested China’s hashrate dominance had fallen to 55% earlier this year as operations begin ramping up, producing new BTC in North America where renewable energy is abundant.

The exodus of Chinese mining farms due to the clampdown will erode this dominance even further, which is ultimately a good thing for the Bitcoin network.

Bitcoin’s energy consumption currently ranks in between the Philippines and Holland with 99.32 TW/h per year.

As reported by CryptoPotato, Elon Musk has been back stirring the crypto twitter pot with comments suggesting that Tesla will buy more BTC when at least 50% of the energy used for mining comes from renewable sources.

Publication date: 
06/14/2021 - 04:57
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