There have been rumblings on Twitter for the past little while about mining in Sichuan province being banned.
Looks like they’re all getting turned off today.
Molly@bigmagicdao
We gonna witness a history in bitcoin mining tonight, all mining farms (about 8m kw electricity load) will shutdown at 12pm Beijing time tonight, Harare rate already dropped significantly after sichuan gov announce shut down bitcoins mining farms in Sichuan.
9:24 AM · Jun 19, 2021
548 Reposts · 1.62K Likes
The whole thread is pretty great, but here’s some videos of miners being turned off.
Molly@bigmagicdao
Some mining farms already starting shutdown their facilities.
2:28 PM · Jun 19, 2021
69 Reposts · 213 Likes
Another video of them crating up miners
Molly@bigmagicdao
More videos about miner packing up and leaving ..
4:00 PM · Jun 19, 2021
16 Reposts · 103 Likes
I’m not a Chinese policy expert, my guess is that they’re shutting down bitcoin mining for two reasons: one economic control and the other is energy consumption goals.
I don’t think this is a huge part of why miners in Sichuan are turning off, see below for what I believe is a more accurate depiction of what’s happening politically there.
But I will say that bitcoin isn’t *well loved* by the government of China, and it won’t be protected when push comes to shove. Or, say, if miner’s energy usage comes into conflict with another, bigger and more important state-level goal, namely a reduction in carbon emissions.
Historically, there are two big sources of energy that Chinese miners use: coal in the Mongolian plains and hydro from dammed rivers. Most of the coal is in Sichaun; most of the hydro power is in Hubei.
It’s hard to get exact evidence for this, but I strongly believe the Chinese politburo takes global warming, or at least their emissions goals, seriously. Shutting the bitcoin miners is an easy win for them to meet their emissions goals.
Since this is Sichuan only, I kinda think the regulation conversation went a little something like this:
National Politburo: Sichuan! You are burning too much coal! Our emissions goals require you to burn less coal!
Sichuan Government Dudes: Yes National Politburo! We will cut our coal emissions!
Sichuan Government Dudes: Miners! You are now banned!
Miners: Oh no. Fine, ok. *Pack their miners up, head to ???*
Nice. Your machines are about to start earning you more bitcoin for every kw that you put into them. As the total hashrate drops, every hash produced by your machine has a better chance of finding the winning block.
In the short term, this means the rate of new bitcoin issuance is slowed down, and that it takes longer to get a transaction confirmed. Your earnings rate should stay relatively unchanged.
In the medium term, the difficulty will start dropping. Blocks production will speed up and the issuance will resume its normal schedule: 6.25 new bitcoin every 10 minutes. When this happens, all the remaining miners will start earning more bitcoin per kilowatt spent.
In the long term, I’d expect these miners to find their way back onto the network somehow. Rumors are they’re looking to move out of China, maybe Kazakhstan, which is nearby.
Or maybe, just maybe…
There has probably never been a better time to get on Alibaba and try to buy some bitcoin miners.
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