The Chinese government criticized the Sichuan province for having a discarded hydro powerplant considering its crypto mining potential.
Chinese journalist Colin Wu (Twitter handle @WuBlockchain) tweeted the news saying:
“Sichuan’s “abandoned hydropower” was criticized by central government. The discarded hydropower accounted for 2/3 of the China’s total and reached 20.2 billion kWh. Crypto mining is the only way to use "abandoned hydropower", which will help local governments to support mining.”
China’s Sichuan province boasts of one of the largest concentrations of bitcoin miners in the world, right after the Inner Mongolian Region and Xinjiang, thanks to the region's extremely cheap electrical costs. Miners in the province pay between 0.065-0.075 yuan or $0.01 per kilowatt-hour and several enterprises that mine bitcoin in the region are approved to leverage hydropower consumption in the province.
Bitcoin Mining In Inner Mongolia and Xinjiang Uygur Autonomous Region
While trading cryptocurrencies is banned in China, mining is legal, at least for now. Inner Mongolia and Xinjiang's provinces have vast coal and hydroelectric resources, thus provide cheap labor and electricity that the crypto mining industry needs. According to the Cambridge Bitcoin Electricity Consumption Index, mining in Xinjiang accounted for over half, or 36% of the country's computational power in the country.
The online tool further states that Inner Mongolia accounts for 8% of the global Bitcoin Mining computing power. Inner Mongolia is clustered with large coal mines and, like Xinjiang, offering inexpensive energy that appeals to the native chip-making factories and crypto mining farms.
China’s Crackdown On Thermal Pollution To Shut Mining In Xinjiang And Inner Mongolia
China’s commitment to the world's carbon emission target at the UN General Assembly in 2020 has hit the Inner Mongolian province and Xinjiang very hard. The Inner Mongolian region was heavily criticized by the National Development and Reform Commission -- China’s top economic planner for being the only province in the country that failed to control energy consumption in 2019.
The province known for its coal mines has since demanded that all crypto mining in the region be phased out by April 2021. This might make Sichuan the next hub for the crypto mining industry in China, as tweeted by WuBlockchain,
“Due to the suppression of thermal power by China's carbon neutrality goal, Sichuan is expected to become more active this summer and become the absolute center of cryptocurrency mining in China and even the world.”
Sichuan The Prospective Hub For Crypto Mining
Sichuan receives 5 months of rainfall and has many tributaries flowing to the Yangtze river, making it ideal for hydroelectric power production throughout the year. It has a vast number of hydroelectric power plants dotting the landscape.
The region’s local governments encourage crypto mining if it leverages the local hydropower, a very attractive offer for mining agencies based out of Inner Mongolia and Xinjiang who are looking for new avenues. Abandoned hydro projects such as the one mentioned in WuBlochain’s tweet will be operational again, allowing Sichuan to become the next great crypto mining hub in China.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.