China is no fan of crypto. But no worries yet as the Chinese government isn’t kicking all the Bitcoin mining farms out of the country. Instead, it is calling for reduced activity in Bitcoin mining farms, especially those located in the Sichuan province.
The province of Sichuan has a local government in China. Calling Bitcoin mining in the area to an abrupt stop shouldn’t be a big deal, right? Well, we are not so sure of the effect yet. Nonetheless, we do know that this local government accounts for about half of the entire hashrate produced in China. So, yeah, it could be a big deal, after all.
Citing the dry season as the reason behind the Sichuan Bitcoin mining farm clampdown, the local government in Sichuan explained that it is necessary that crypto mining operations in the area are curtailed to ensure power can be sustained for ‘normal’ electricity consumption.
Explaining further, the local government added that the area is touted for its high hydropower energy in the wet season, but the opposite is the case during the dry season. Due to the excess power available during the wet season, most Bitcoin miners migrate to Sichuan to leverage the excess energy produced. During the dry season, electricity generation tends to fall sharply; therefore, it is critical to reduce the use of energy in the area to ensure the depleting energy is enough to last until the wet season.
Temporary Measure Against Crypto Mining?
A representative of the Chinese mining industry conveyed to the global crypto community that he estimates this is only a temporary measure and that it would have little or no effect on the Bitcoin market as the cleanup is exclusive to the Sichuan area, not the entire cryptocurrency country. “It’s not going to make a huge impact to mining in China,” the representative stated.
Bitcoin miners in the areas are advised to stand down to avoid stipulated penalties.
Although China is not a huge fan of decentralized cryptocurrencies, it is yet the home of many Bitcoin mining farms. Perhaps you could tag it to the cheap electricity in the country, but what we do know for sure is that the country alone accounts for two third of the Bitcoin’s global hashrate. Such a gigantic figure that if left out could impact the world’s entire virtual currency market massively.
Would this affect Bitcoin’s price and availability? Is this part of China’s plan to crack down on decentralized cryptocurrencies? What do you think about China cutting back on Bitcoin mining?
