The government will punish Illegal mining farms.
Miners to suspend all services.
Bitcoin mining in the Xinjiang province is just about over. The latest region to ban the operation is Qinghai, where miners have been ordered to stop new projects.
The government will suspend all existing bitcoin mining operations by the end of the year. Officials are going after illegal mining farms that are currently hiding under the guise of big data centers.
BTC PEERS reported that Bitcoin miners in the Zhundong Economic-Technological Development Park of Xinjiang province were ordered to suspend all mining operations. This move triggered a significant drop in Bitcoin’s hash rate.
Why is the government suspending all bitcoin mining operations?
Cryptocurrency mining uses enormous amounts of computing power, energy consumption a significant overhead cost. Thus, when rain is plentiful in summer, miners rush to hydropower stations, which have enough supply and are located in far-off locations, making it hard for them to plug into the national grid. Local governments will often offer power cheaply—or free—to attract workers and get a boost to their gross domestic product figures. “The water would just flow away, so rather than waste it, we contribute to China,” says Tang.
Cryptocurrency mining in the summer uses sustainable and environmentally friendly power sources because of the heavy rain. China has dry winters, meaning the miners have to seek alternative and cheap electricity supplies; solar and wind farms don’t produce steady enough cache-run mining operations. Miners, therefore, turn to the only other alternative: coal. Mining rigs are driven thousands of miles across China to Inner Mongolia and Xinjiang. As the seasons change, what some consider the world’s greenest industry—monetizing surplus renewable energy—quickly becomes probably its dirtiest: burning coal to create currency.
This effect on the environment might be one of the reasons why the government might be suspending mining.
Despite China’s Financial Stability and Development Committee calling for a crackdown on Bitcoin mining and trading, very few provinces implemented the ban.