The authorities are squeezing Chinese Bitcoin miners in Sichuan due to a crippling electricity shortfall. The hub of Bitcoin mining in China, Sichuan province, is experiencing severe crackdown by the authorities as they grapple with electricity outages.
Bitcoin mining involves huge electricity consumptions, and Chinese regulators are forcing them to shut down operations.
The advent of the dry season in Southwest China making the matter difficult for the Chinese Bitcoin miners. The electricity regulator has forecast a rise in electricity consumption in the residential and commercial centres. Their priority would be to cater to these sectors first and then serve the local crypto industry.
Chinese Bitcoin miners are pinned against the wall
Reportedly, Sichuan authorities have asked the mining sector to tone down their consumption of electricity. The southwest region in China will also experience a dry season that will end in April next year.
Sichuan and neighbouring areas get electricity from the numerous hydro-electric projects scattered across the region. In the dry season, the electricity generation capacity of these plants reduces significantly. So, the authorities have to divide the available electrical power judiciously among the various sectors.
Bitcoin mining falls under high electricity consumption sectors. It is therefore logical for the authorities to tone down large scale operations and cater to the demand of the residential areas first.
Earlier this year, the Sichuan authorities have penalised many hydro plants for giving direct electrical connections to some Bitcoin miners without any compliance. Reports suggested that Sichuan authorities have also discussed taxation issues with some prominent Bitcoin miners.
Sichuan, epicenter of global Bitcoin mining, is facing tough times
Sichuan province alone accounts for around fifty per cent (50%) of the entire Bitcoin hash rate in the world. The crowded bitcoin mining industry in Sichuan has forced many small players to move to greener pastures. Inner Mongolia became a hot destination for some years until authorities began a severe crackdown against Chinese Bitcoin miners.
The year 2019 has been a landmark in Chinese cryptocurrency mining industry calendar. Last month, Bitcoin was removed from the ‘prohibited industrial activities’ list by the National Development and Reform Commission. The western competitors of the Chinese bitcoin miners will surely use this opportunity to increase their dominance.
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