China’s Sichuan province is gearing up to extend its bitcoin ban to mining operations as part of its wider crackdown on the cryptocurrency industry.
According to local media outlet
Because mining has become so competitive, few ordinary bitcoin users can make a profit mining the cryptocurrency. Hashpower has instead become pooled in large mining farms centralized in regions of the world that offer miners competitive advantages — namely, cheap labor and low-cost electricity. A significant portion of bitcoin mining is currently based out of China’s Sichuan province, where operations have access to low-cost electricity produced by state-subsidized hydropower plants during the region’s rainy season.
Earlier this year, Chinese regulators began to crack down on the burgeoning cryptocurrency industry by making it illegal to conduct or participate in initial coin offerings (ICOs). Soon after, they forced order-book cryptocurrency exchanges to cease their operations. However, although there were
Now, however, Sichuan’s state power company has apparently set the practice in its crosshairs, warning grid-connected power stations that they must stop bypassing the state power company by selling excess electricity directly to miners, whose operations are often situated directly next to the power plants.
As written, the order appears primarily targeted at smaller miners, who set up shop in Sichuan during the rainy season but are forced to move once winter arrives; larger operations, such as mining behemoth Bitmain, have
Either way, some industry observers believe this phase of China’s bitcoin ban could actually prove to be beneficial to the network in the long run — if not to the Chinese miners themselves — since it would “level the playing field” for miners outside of China and presumably lead to more geographic decentralization of mining operations.
Moreover, although the network may see a net decline in hashrate, it is unlikely to create noticeable disruptions in either the short- or long-term.
“The wind down of hash power, if any, will be a very slow process. The risks here are mostly monetary, not jail time,”
Featured image from Shutterstock.
Published at Tue, 14 Nov 2017 14:22:12 +000024 hour - BITCOIN Mining Contract (TOP CRYPTO OFFER)
End Date: Wednesday Oct-3-2018 14:57:35 PDT
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