Bitcoin miners using hydropower asked to continue in Sichuan 🚨 This article is 4 years old...
Bitcoin miners using hydropower asked to continue in Sichuan
Local reports say miners were asked to delay their move until later this year.
2 min read
Updated: Jun. 7, 2021 at 5:44 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin miners in China’s Sichuan province can continue their operations until September this year, local tech publication TechNode reported today. The move comes on the back of recent regulations involving stricter crackdown of the activity.
Citing sources who attended a regulatory meeting regarding crypto mines in the region, the report said that mining operators were asked to stay until after the rainy season ends in Sichuan.
The sources additionally stated the decision was made to avoid a sudden loss of economic activity (and jobs) in the region. No official statements have been issued as of press time, but the report cushions one of the most crucial crackdowns to occur in recent times.
In May, Vice Premier Liu He and the State Council said they would soon crack down on the trading and mining of cryptocurrencies in the country. “[We will] crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field,” the officials said, with a drastic market sell-off ensuing hours later.
Energy FUD
Industry observers said the comments came after renewed concerns of energy usage for proof-of-work cryptocurrencies like Bitcoin and Ethereum. “Crypto mining consumes a lot of energy, which runs counter to China’s carbon neutrality goals,” said Chen Jiahe, a chief investment officer of Beijing-based family office Novem Arcae Technologies, in a statement at the time.
Mining, for the uninitiated, uses up a massive computing system that solves millions of complex calculations each second to validate transactions on the Bitcoin network (a process known as ‘proof of work’).
This requires massive amounts of energy for the maintenance, cooling, running of the machines. But some say as the source of this is via coal and fossil fuel-powered energy producers, it leaves behind a big carbon footprint for seemingly little benefit to the world.
That is, however, contrary to China’s grand plan to go green and achieve carbon neutrality. Separate reports also claim that illegal coal extraction—the energy source of most mining farms—resulted in a spike in electricity consumption from mining farms used for Bitcoin were behind the rising demand for coal in parts of China.
That, in turn, caused coal producers to restart their plants to meet demand without regulatory clearance, leading to higher safety risks and a surge in fatal accidents in 2021.
But while the to-and-fro continues. It seems like the rainy season couldn’t come at a better time for the country’s storied miners.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.