A total of 26 mining farms will shut down by the end of June resulting from an order issued by the municipal government of Ya’an in the Chinese province of Sichuan.
China’s Crypto Mining Exodus is Underway
Bitcoin mining operators should leave Sichuan, China, by June 25, according to local news outlet PANews, which cited sources close to the matter. PANews informs that the decision was taken at a meeting of The Science and Technology Bureau and the Sichuan Ya’an Energy Bureau on June 17.
The order, which crypto-journalist Colin Wu claims to have seen, applies to a total of 26 mining companies. It refers to the energy-intensive process of adding new transaction records to Bitcoin’s public ledger and maintaining a log of existing ones.
More than half of the world’s bitcoin miners are located in China and are concentrated in four provinces: Xinjiang, Inner Mongolia, Sichuan and Yunnan. Sichuan and Yunnan are well known among Bitcoin miners for their cheap hydroelectricity production, while Xinjiang and Inner Mongolia are powerful coal-producing provinces.
Earlier this month, one of the leading media sources on China’s technology, TechNode, said that miners had till September to cease their activity in Sichuan.
Colin Wu’s report on Twitter says that the document under question relates to 26 large mining projects and seeks their monitoring and liquidation. Wu adds that due to a large number of small and medium-sized hydropower stations in Yunnan, Sichuan, it may be difficult for the government to oversee them. In Wu’s opinion, large-scale projects will cease in the near future.
Inner Mongolia First to Start the Crackdown
Inner Mongolia has already taken the first steps against the mining activity in the area. After the region failed to meet Beijing’s climate targets, bitcoin miners were ordered to leave with a two-month notice. The province leaders condemned crypto miners for Inner Mongolia’s failure in energy targets.
Castle Island Ventures founding partner Nic Carter says that the Chinese government is quickly going from announcing its new policies to their implementation. Carter adds that the hashrate in China is decreasing, which means that the bitcoin mining installations are closing throughout the country.
Hashrate means the total combined computational power that is being used to mine and process bitcoin transactions. Carter estimates that China’s hashrate will decline by more than a half as a result of the measures.
Experts say that bitcoin miners might redirect their activity to Texas, which is known for some of the world’s lowest energy prices. Additionally, some 20% of its power was coming from wind as of 2019.