{"id":11087,"date":"2020-06-08T04:36:22","date_gmt":"2020-06-08T04:36:22","guid":{"rendered":"http:\/\/emilynews.com\/blog\/?p=11087"},"modified":"2020-06-08T04:46:16","modified_gmt":"2020-06-08T04:46:16","slug":"news-commentary-1083-bitcoin-miners-in-china-are-moving","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=11087","title":{"rendered":"News Commentary #1,083 – Bitcoin Miners in China are Moving"},"content":{"rendered":"\n

What are the Implications?<\/strong><\/p>\n\n\n\n

A recent article in Bitcoin dot com<\/em> by Jamie Redman describes the problems that Bitcoin miners face in China as they try to find the cheapest sources of power.\u00a0 Only a decade ago, a person could mine Bitcoin on his personal computer.\u00a0 Now, Bitcoin mining requires massive computer facilities in order to be competitive. \u00a0And, these facilities require equally massive amounts of power.\u00a0 I\u2019m not sure of this, but the cost of power to operate a mining facility, rather than the initial outlay for hardware, might be the determining factor when it comes to whether or not a mining operation can be profitable.\u00a0 The result of this is that miners must always search for and locate their mining rigs in locations that have the cheapest power sources.\u00a0 This is the background to the article by Redman that I\u2019ve reprinted below.<\/p>\n\n\n\n

There is another issue associated with all this that I have not seen discussed anywhere: the environmental impact of this increased demand for power.  Many people believe that Bitcoin will replace fiat currencies as the future medium of exchange.  Well, the demand for power to mine Bitcoin has increased astronomically in only the past decade.  What will the demands for power to mine Bitcoin look like a decade or two down the road?  Even renewable energy sources might be taxed.  The article by Redman implies that Bitcoin mining might be causing hydropower shortages in regions of northern China and might even be related to a hydropower station \u201cdischarge\u201d (I don\u2019t know what that is).  Is solar power an alternative?  I used to be n that business and the thought of covering acres and acres of real estate with solar panels isn\u2019t a particularly encouraging idea.  Of course, in addition, solar only works when the sun is shining.  So, the miner would have to rely on grid power for probably 16 hours per day (at considerable cost).  Again, all this is food for thought.  I don\u2019t pretend to have the answers\u2026       <\/p>\n\n\n\n

Here\u2019s the article:<\/p>\n\n\n\n

Chinese Government Crackdowns and Cheap Hydropower- Miners Migrate from North to South China<\/strong><\/p>

China-based bitcoin miners have started to migrate southbound from North China, according to local reports. The operators are having difficulties and are transitioning mining facilities for cheap hydro-powered electricity. Testimonials also show that 64 mining operations in the prefecture in Yunnan have been threatened by local authorities. Sources say a hydropower station discharge sparked a number of investigations throughout the region.<\/p>

Regional reports disclose that a number of bitcoin mining operations are up and moving from areas in North China to regions in South China. On May 22, news.Bitcoin.com\u00a0reported\u00a0on miners in Sichuan China having issues with electrical shortages. More recent news shows that local governments are giving owners of mining operations a hard time again.<\/p>

Despite some of the issues with shortages and local law enforcement, miners are migrating from thermal powered facilities to hydro-powered operations in China\u2019s southern provinces. 8btc financial columnist, Vincent Teh, details that \u201c20% \u2013 35% of hydropower-powered crypto mining farms are vacant in north China\u2019s Yunnan, Guizhou, [and] Sichuan province.\u201d Teh\u2019s report adds:<\/p>

For cheaper electricity, Chinese crypto miners often travel long distances or even take risks.<\/em><\/strong><\/p>

The local reporter discussed the situation with bitcoin miners operating in Sichuan, and he explained that farms in the province are not \u201csaturated and in dire need of mining rigs.\u201d Teh further revealed that when miners up and move operations from North China to South China, the extent of the migration can take anywhere between \u201c10-17 days.\u201d The rain season has started and this means that hydropower will be more plentiful over the next few months. Chinese miners have been migrating back and forth from the North to the South for years.<\/p>

Additionally, Teh spoke with a Chinese miner named Yang Haolin who explained that in Inner Mongolia and the Xinjiang province, has electricity price around 0.35 Chinese yuan per kilowatt-hour (kWh) or $0.04. In Yunnan, Sichuan province, and Guizhou prices can be about 0.2 Chinese yuan per kWh. \u201cThis year is not the same as before,\u201d Haolin stressed.<\/p>

\u201cMany mining farm owners who have signed annual contracts with thermal power plants choose to default. M21 runs with thermal power produces a profit of five Chinese yuan per day, while produces a profit of 15 Chinese yuan per day with hydro-power.\u201d Haolin also added that he believes most of the migrating bitcoin miners have already left.<\/p>

Despite the migration efforts in China, the city of Yunnan has been pressuring specific operations that don\u2019t comply with regulatory policies. Hydropower plants are a big industry in Yunnan and Sichuan and a large concentration of bitcoin miners reside in those regions. However, a recent discharge at a power plant has invoked authorities to come into the region and investigate all the operations using large amounts of electrical resources.<\/p>

In the prefecture in Yunnan, the lawmakers in Dehong are threatening 64 mining operations that are accused of being illegal. The explosion at the Yunnan hydropower station had injured five people and killed six individuals. Word on the street is Yunnan and Sichuan leaders will crackdown on illegal mining operations that have skipped out from asking permission from local authorities.<\/p><\/blockquote>\n\n\n