Bitcoin mining industry life under regulatory pressure: collective wait-and-see, unpredictable risk of going offshore

Is Bitcoin mining not environmentally friendly, or is Chinese mining not environmentally friendly?

Bitcoin miners who have been quietly mining in remote areas of China may not have thought that they would be the first to be hit by financial regulation.

Under high regulatory pressure, going offshore? Retreat? PANews interviewed a number of mining industry practitioners, most of whom are waiting helplessly, expecting the policy to have room for moderation, while there are more unknown risks and challenges in going offshore.

The “Sword of Damocles” of mining regulation is hanging high

May 27, the National Energy Administration of Sichuan supervision office issued a notice, will be held on June 2 on the virtual currency “mining” related research forum, the meeting includes the State Grid Sichuan Electric Power Company, Sichuan Energy Investment Group, respectively, to report their respective supply area virtual currency “mining” and related recommendations and shutdown virtual currency “mining” on the impact of this year’s Sichuan abandoned hydropower analysis; and Sichuan Power Trading Center to report hydropower consumption demonstration area within the big data enterprises to participate in market transactions and related recommendations; and power sales companies to report the agency big data enterprises to participate in market transactions and related recommendations.

And May 25, the Inner Mongolia Development and Reform Commission issued the “Inner Mongolia Autonomous Region Development and Reform Commission on the resolute crackdown on punishing virtual currency “mining” behavior eight measures (draft for comment)”, said to further clean up the virtual currency “mining” behavior. Strengthen the crackdown and discipline, build a long-term regulatory mechanism, maintain market order, big data industry environment and prevent financial risks. The policy provisions are also more detailed, which even involves the mining of Internet cafes, into the blacklist of untrustworthy and other previously unseen content.

Sichuan, as China’s largest bitcoin mining province, can account for more than 50% of the country’s electricity consumption during the water harvesting period. The notice issued by the regulatory office, the specific regulation will also be approaching, finally to Inner Mongolia like a comprehensive cleanup of virtual currency “mining” behavior, or according to their own situation to develop the corresponding consumption policy? The “Sword of Damocles” over the head of the domestic mining industry is once again hanging.

In this regard, the person in charge of the mint mining mint cool young in an interview with PANews, said that according to the actual situation of each province to be more likely to be eliminated. “Carbon da peak is an important plan of the national 14th Five-Year Plan, 2021 abundant water period abandonment of large provinces should not be affected, mining is a very low carbon and environmental protection industry, the disadvantage is high energy consumption, the real impact is in the flat water period and dry water period.”

“This year, there may be a large number of mining machines transferred overseas during the flat and dry period, but this also depends on the control of an overseas epidemic.” Mint cool young added.

But it’s worth mentioning that Sichuan and Inner Mongolia are completely different, in Sichuan bitcoin mining with hydropower, which is a clean, renewable energy, and most of the hydropower used by mining companies comes from the “park electricity” in the hydropower consumption industry demonstration zone in Sichuan province. These park power comes from the national grid, with transparent, stable and guaranteed prices, and is consumed in the government-planned industrial parks.

As a province rich in hydropower resources, Sichuan took advantage of its own advantages and built a large number of hydropower stations with the encouragement of the state in earlier years. However, the supporting industries and consumption did not keep up at that time, plus Ganzi and other places are in the transmission cross section, electricity is difficult to transmit out, resulting in the existence of a large number of abandoned water and electricity.

Until 2013 and 14, the mining industry gradually emerged, miners saw the cheap hydropower resources in Sichuan, and gradually began to build mining farms in Sichuan. With the rising price of bitcoin, the scale of mining has also skyrocketed, and the scale of electricity used for mining has also gone up, but this has largely solved the problem of electricity disposal. This model is currently well implemented in Sichuan, and the follow-up may also see follow-up in Yunnan, Guizhou and other southern mining provinces.

Unlike Sichuan, bitcoin mining in Inner Mongolia with basically thermal power, there may also be some local irregular mining behavior, but now facing Inner Mongolia in energy consumption, industrial structure of upgrading and adjustment, this further clarification of mining regulatory measures, perhaps instead conducive to the long-term, orderly development of the entire mining industry.

In fact, according to industry insiders, this time Inner Mongolia policy introduced local mines have been shut down almost. As early as March this year, Inner Mongolia has issued “our region to be fully cleaned up and shut down by the end of April bitcoin mining business”, which clearly pointed out that to control the scale of high energy-consuming industry capacity, reasonable and orderly control of data center construction scale, strictly prohibited new virtual currency mining projects, comprehensive cleanup and shutdown of virtual currency mining projects, all out by the end of April 2021.

Behind the tough hand of Inner Mongolia on virtual currency mining is the policy pressure from the carbon peak and carbon neutral.

As a major energy province in northern China, Inner Mongolia has gradually formed an industrial structure dominated by energy-heavy industries over the years, with nearly half of its enterprises in energy-intensive industries and 87.2% of the added value of energy and raw materials industries above the scale. Public data show that in 2020, Inner Mongolia’s energy consumption per unit of GDP is three times the national average, and the total energy consumption of coal accounted for up to 80%.

And China had announced at the 75th General Debate of the United Nations General Assembly that it would adopt stronger policies and measures to make carbon dioxide emissions strive to peak by 2030 and work towards carbon neutrality by 2060. Therefore, for Inner Mongolia, carbon peaking and carbon neutrality has become a considerable test of the local government’s ability to govern, and it faces greater pressure and cost of transformation to reduce emissions compared to other south-central provinces, and will be more strongly impacted in the short term.

Chinese miners going to sea en masse? Safety and stability is the primary consideration

“Let’s see, the policy should still not be completely one-size-fits-all.” Miner Xiaoying is still waiting with a glimmer of hope, she told PANews, at the moment there is only one step to take to see what happens.

“Whether to shut down the virtual currency “mining”, June 2 will have the results, or see it again.” Dawang, who has been in the mining industry for many years, also said that he would take another look and wait until the specific policy comes down before making the next arrangements.

However, miner Ava said to PANews, Sichuan specific policy down or enough to hang, “now the mine is closed a lot, environmental protection card does not give electricity, said the water generated affects the environment.” And a few days ago, the State Grid Sichuan Aba State Power Co., Ltd. issued a power outage to limit the power to inform the book, plans to May 16 onwards to the hydropower consumption demonstration area in all big data users to implement temporary all-day power restrictions, probably to May 25 this situation is alleviated.

If Sichuan follows Inner Mongolia’s policy of similar tightening, where should miners and miners go from here. TOP CEO Jiang Zhuoer told PANews, “That will still go overseas, the first choice of North America and other developed countries, North America is relatively more friendly political environment and regulation, such as the United States and Canada; Central Asia is now more miners go to Kazakhstan; the Middle East and Russia, most miners should not The miners have previously appeared in the local digging for a period of time, because they received a variety of investigation and ban confiscated the mining machine, the first consideration at sea is definitely the machine safety issues.”

Bitcoin mining industry life under regulatory pressure: collective wait-and-see, unpredictable risk of going offshore

And previously, at the second Bit Fawn 421 Feng Shui Festival and Mining Ecology Conference, Wang Wenguang, head of Bit Fawn Data Center, said that industry relocation has its own laws, the general trend has been formed, which is not artificially able to change, and each economic body will chase the soil suitable for its growth to go. He also stressed that the future of the mining industry is overseas and that the domestic share of computing power will fall to 50% or even below after this round of bull market.

Jiang Zhuoer depicted the possible mining scene in China after the strictest regulation: “then part of the mining machine by the domestic small and medium miners and miners from the family digestion, the domestic digging can not be transferred to overseas; and the other existing mining machine manufacturers some of the orders such as S19 new mining machine will be mainly sold abroad, to domestic sales is to combat regulation, to sell abroad is to export foreign exchange. This everyone should know how to choose.”

Is bitcoin mining not environmentally friendly, or is Chinese mining not environmentally friendly?

On May 25, North American mining company Marathon Digital announced new plans to build a new mining facility in Texas, which will accommodate 73,000 bitcoin mining machines and will increase Marathon Digital’s total bitcoin hash rate to Marathon was originally a US-based patent acquisition company, but has since changed its name to focus on mining digital assets and has purchased tens of thousands of Ant S19 ASIC miners from Bitmain.

And just a few days ago, Marathon also joined Argo Blockchain, Blockcap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, and many other prominent North American mining companies at a Musk-initiated discussion on disclosing the energy consumption of bitcoin mining in a closed-door meeting to discuss the disclosure of bitcoin mining energy consumption. The meeting was moderated by MicroStrategy CEO Michael Saylor and ended with a consensus to form a Bitcoin Mining Council, with the miners promising to release their current and planned renewable energy consumption.

On May 26th, a Coinbase article, “Is Bitcoin the Clean Energy Enabler? Clarifying Five Myths About Bitcoin Mining” article generated a lot of attention again. The article mentions that bitcoin mining is not a significant contributor to global warming, but instead miners are incentivized to seek out the cheapest power, excess energy, and renewable energy sources, whose environmental impact remains negligible.

At the same time it’s hard not to be shocked when hearing that bitcoin mining consumes energy on a scale equivalent to a country like Norway. But whether or not energy is used wisely depends heavily on the value derived from the use of the resource, and the total economic value of Bitcoin has exceeded $1 trillion many times over. Its consumption of energy is actually still far less than that of other financial systems: only half that of gold mining, and less than a fifth of the energy used by bank branches and ATMs. coinbase brought back awareness to cryptocurrency mining as an industry with an article.

Two weeks after Musk said that Tesla was suspending accepting bitcoin for its vehicles due to concerns about the increased use of fossil fuels from bitcoin mining, to the current reversal where listed US companies, mining companies, and even traditional funds led by Musk will acquire more bitcoin and begin to take the reins of bitcoin mining towards sustainable energy globally.

So, is bitcoin mining not environmentally friendly, or is Chinese mining not environmentally friendly?

Xiong Yue, president of the Coin Trust Institute, said, “I’m not concerned with the nebulous issue of who gets the right to keep the books, that’s all about the outcome. I am concerned about the rules, Musk has made bad. Sichuan is also very rich in hydropower resources, whether you use it or not, the water is to flow to the sea. And the large mines, guided by the price mechanism, are basically built right next to these power stations, which is in the abatement park. Now well, these are not environmentally friendly, Musk engage in an association to open the light, immediately environmentally friendly.”

In any case, in retrospect, bitcoin arithmetic and the infrastructure built around it has accelerated to North America, and the process of de-Chinaing bitcoin arithmetic has begun.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bitcoin-mining-industry-life-under-regulatory-pressure-collective-wait-and-see-unpredictable-risk-of-going-offshore/
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