Bitcoin’s network-wide computing power has once again slipped, dropping 19% in half a month. There is no doubt that the Chinese regulatory outpouring is working.
On May 21, the State Council’s Financial Stability Development Commission (FSDC) issued a clear “crackdown on bitcoin mining and trading practices,” and the action soon began in northern China. 25, the Development and Reform Commission of the Inner Mongolia Autonomous Region issued a draft of “eight measures to resolutely combat and punish virtual currency “mining” practices. The draft was released for comment.
The notion that “Chinese miners control Bitcoin’s computing power” has been circulating for years after the industrialization of Bitcoin mining, which relies on electricity. Last month, a paper published in Nature Communications by scholars from the Chinese Academy of Sciences and Tsinghua University put that claim into perspective: Chinese miners account for more than 75 percent of the bitcoin network’s arithmetic power.
The paper notes that without any policy intervention, the annual energy consumption of China’s bitcoin blockchain is expected to generate 130.5 million metric tons of carbon emissions in 2024, which would exceed the total annual greenhouse gas emissions of the Czech Republic and Qatar.
Such consequences clearly run counter to the country’s “carbon neutral” “carbon peaking” goals proposed this year. in May, policy intervention came down fast. China’s bitcoin miners will face a choice: shut down or relocate?
The decision comes at a time when Musk, who “turned his face” to bitcoin some time ago, is back, with the Tesla founder calling on miners around the world to use clean energy to mine and help make bitcoin sustainable via social media.
As China plans to clear out the bitcoin mining industry, some North American companies and capital are getting excited.
Carbon Neutrality” Targets Clearly to Cut Bitcoin Mining
On May 26th, according to OKLink, Bitcoin’s network-wide computing power dropped to 145 EH/S, a 19% drop from this year’s peak of 180 EH/S in half a month. The last big arithmetic slide started on April 16, when it dropped from 168 EH/S to 136 EH/S in about a week, making it the lowest point since the beginning of the year.
We found that last year’s May 26th was also the lowest point for the whole network, at 90.35 EH/s. Last year’s peak was on October 17th, at 146.47 EH/s, which was instead the lowest level for the whole network this year. As you can see, the arithmetic power is increasing between one year as the price of BTC is high.
Bitcoin miner Li Ang (a pseudonym) analysis, according to the usual, April, May is in the stage of some mining sites from the north to the south migration, thermal mining to hydropower mining, to prepare for the abundant water period, “this year, the arithmetic power decline and the transfer of a certain relationship, and in April this year, BTC breeze to $ 64,000 a piece, the network mining difficulty is also increasing, in general, inefficient mining machine will exit the arithmetic power market, will also bring The decline of network-wide arithmetic power.
For miners, the favorable water period in southwest China, such as Sichuan and Yunnan, has turned into an uncertainty this year, and the uneasy atmosphere brought by tightening regulation is hanging over their heads.
After a meeting of the State Council’s Financial Committee on May 21 made it clear that it would “crack down on bitcoin mining and trading practices,” policy news from Inner Mongolia began to spread in mining circles.
On May 25, the “Eight Measures of the Development and Reform Commission of Inner Mongolia Autonomous Region on Resolutely Combating and Punishing Virtual Currency “Mining” (Draft for Comments)” (“Draft for Comments”) was made available to the public.
The Draft for Public Comments specifically mentions the requirements of the 51st meeting of the Financial Committee of the State Council regarding the crackdown on bitcoin mining and trading, and states the specific measures for public comments, including the pursuit of responsibility for industrial parks, data centers, self-provided power plants that provide venues for “mining” and subjects that engage in “mining” (large data centers, cloud computing enterprises, communication enterprises, Internet enterprises, Internet cafes, etc.); the pursuit of responsibility for the use of virtual In addition, if the company is engaged in illegal acts such as money laundering and illegal fund raising in the form of virtual currency, it will be transferred to the relevant departments; if the company and personnel are involved in “mining”, they will be included in the blacklist of those who have lost trust; if public officials are involved in virtual currency “mining” or provide them with convenience and protection, they will be transferred to the discipline inspection and supervision authorities.
As early as February this year, the Inner Mongolia Development and Reform Commission had issued “on ensuring the completion of the “14th Five-Year Plan” energy consumption double control target tasks of a number of safeguards (draft for comment)”, plans to fully clean up and shut down virtual currency mining projects, all out by the end of April.
The 14th Five-Year Plan’s energy consumption double control target refers to the strict control of high energy consumption and high emission projects. This year, Chinese government departments have proposed carbon peaking and carbon neutral targets, and the timeline is becoming clearer. Since April, several provinces and cities across the country, including Guangxi and Liaoning, have been implementing the ‘double control’ mandate, with various initiatives introduced around the country, and Bitcoin, which relies on electricity production, has hit the gun.
On April 6, a paper titled “Policy Assessment of Carbon Emissions and Sustainability of Bitcoin Blockchain Operations in China” was published in Nature Communications, a paper from scholars at the Chinese Academy of Sciences and Tsinghua University that has sparked interest in Chinese and even overseas media.
The paper states that without any policy intervention, China’s annual bitcoin blockchain energy consumption is expected to peak at 296.59 terawatt hours in 2024, generating 130.5 million metric tons of carbon emissions, which would exceed the total annual greenhouse gas emissions of the Czech Republic and Qatar. A statistic in this paper also puts Chinese miners back on the map, “Chinese miners account for more than 75% of the Bitcoin network’s computing power.
The paper uses data on mining pools’ arithmetic power. Indeed, in terms of the teams that mining pool companies belong to, there are Chinese entrepreneurs behind F2P Fish Pool, AntiPool Ant Pool, and Poolin Coinprint Mining Pool, which have a large proportion of arithmetic power. Some industry insiders point out that this does not indicate the geographical distribution of specific miners’ arithmetic power. In addition, there are already some domestic mining farms that have adopted clean energy or power consumption to mine according to the policy requirements of the place where they are located.
The most typical area of power consumption is precisely Sichuan, since last year, Sichuan Aba, Ganzi, Ya’an and other places began to build a demonstration park of consumption, the surplus electricity sent by dispatch to the load point with electricity demand, some parks appear a lot of big data enterprises. The industry reveals that some big data enterprises in the park are in fact mines, but they are also stationed in accordance with local policy requirements and park regulations.
And under the state’s “double control” goal, this year, Sichuan’s consumption park also began to limit power. Before regulatory requirements were issued for bitcoin mining, a temporary all-day power restriction initiative was implemented in a local demonstration zone with hydropower consumption on May 16. A few days later, bitcoin’s network-wide computing power plummeted by 20%.
On May 25, a miner at a mining site in an abatement park in Sichuan said, “Today’s abatement power was supplied on time. Although he was optimistic about mining during the water harvesting period, his tone could not help but reveal his helplessness, “Let’s take one step and see what happens.
Musk’s “group” of overseas capital beckons to the mining industry
When China showed a clear attitude towards the bitcoin mining industry, miners had to make a choice before specific enforcement policies arrived: shut down or relocate?
In a wait-and-see moment, Tesla founder Elon Musk is back, and on May 25, Musk took to social media to say that he is in contact with crypto mining companies in North America, calling on miners around the world to use clean energy to mine in order to help make bitcoin sustainable.
Mike Seiler, CEO of US-listed MicroStrategy, confirmed Musk’s move. He said on social media that he hosted a meeting on May 24 in which North American miners have agreed to form the Bitcoin Mining Council (BMC) to improve transparency in energy consumption and accelerate sustainability activities worldwide.
MicroStrategy and Tesla are both publicly traded companies that hold bitcoins. According to media reports, the meeting was attended by eight other organizations, including Argo Blockchain, Blockcap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, Marathon Digital Holdings, and others, which decided to form an organization that would standardize the disclosure of energy consumption and seek to reach the goal of mining with renewable energy.
In fact, mining with clean energy is not new. in April 2021, bitcoin miner Gryphon Digital Mining stated that its bitcoin mining operations would use 100% clean energy. At the time, the company revealed that there were at least three global companies using clean energy to mine bitcoin, including the UK’s ArgoBlockchain and Canada’s Neptune Digital Assets, both of which are publicly traded companies.
This year, with bitcoin prices high, the market has been dubbed an ‘institutional bull’ and the source of large volumes of institutional capital is none other than companies like the US-based Grayscale Fund, MicroStrategy and Tesla. With the outside world believing that Chinese miners hold the majority of bitcoin production sources, overseas capital and companies are revealing their ambition to get a piece of the action. The iron fist of Chinese regulation has created a good time to do so.
North American-based Foundry USA has long been targeting the Chinese mining industry, and the mining pool announced in April this year that digital asset mining eco-services provider Bit Xiao Deer had entered into a partnership with it. BitLuck, which has previously made a name for itself in the industry by selling cloud computing power, is backed by Bitcoin mining giant Bitmain.
Mike Colyer, CEO of Foundry, said in a speech, “We welcome the global cloud mining leader, Bit Fawn Group, as the first Asian institutional customer of Foundry USA’s mining pool. The news of the partnership was placed on Foundry USA’s official blog, which shows the importance it places on its Asian customers.
BTC Power Share by Pool
Mike Colyer has been hoping that Foundry USA mining pools will break into the top five in terms of share of arithmetic power. BTC.com’s May 26 data shows that the pool is currently ranked 13th with a 24-hour share of only 1%, while the top three are Fish Pool, Coinprint and Ant Pool, with shares of 25.7%, 13.3% and 12.4%, respectively.
In fact, it’s not just capital and companies in Europe and the US that are eyeing bitcoin mining, China’s next-door Kazakhstan also has a bitcoin mining industry, with a mining farm called Enegix having reached out to domestic blockchain media via social media platforms last year, hoping to introduce Chinese miners to the mining situation in Kazakhstan. It was reported that the bitcoin hash rate from the country’s mines accounted for 6.17% of the world’s total that year, second only to China, the US and Russia.
Already, miners are posting pictures in their circle of friends, and some miners are being encapsulated for shipment to Kazakhstan. The industry has also started to receive olive branches from Russian mining companies amidst the regulatory tightening trend in China.
From trading to mining, the ‘de-Chinaing’ of Bitcoin is gradually becoming a reality. The only thing that hasn’t changed is that the network is still running 10 years after its birth, and while Satoshi Nakamoto, who created it, has disappeared, it is looking more and more stubborn.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/where-do-miners-go-with-chinas-regulatory-fist/
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