China places ban on world’s second-largest mining region

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For China’s mining industry, it’s a step forward and a step back as China places a ban on world’s second-largest mining region, putting 9& of Bitcoin’s hashrate ar risk.

A decree issued last week mitigates any benefits of the Chinese government allowing the use of hydro-electricity for “blockchain projects” in a region noted for its high concentration of Bitcoin miners.

No Crypto, Yes Blockchain – China mining ban

Sichuan regulators have sent a notice to all crypto-businesses in the region, requesting that all mining and related activities be stopped immediately. All subordinate offices and municipal administrations have been instructed to “assist” miners in shutting down their operations.

Sichuan’s hilly terrain, low-cost electricity, plentiful skilled labor, and naturally cool environment make it a hotspot for Bitcoin and cryptocurrency miners. The region is home to the regional offices of mining behemoths Bitmain and AntPool, among others.

If the tweet is taken into account, the region generates 9.66 percent of all Bitcoin hash rate. The assertion is supported by a peek at BTC.com’s mining page. China is home to six of the top ten miners, with several probably in Sichuan.

China’s data is notoriously tough to obtain. Nonetheless, forecasts based on several stories can help predict what the new Sichuan directive will imply for Bitcoin.

PANews, a blockchain research firm based in Asia, tweeted the following:

Twitter

Xinjiang, located in northwest China, takes first place. The province includes a wide area of deserts and rugged terrain that is ideal for mining. The region appears to be responsible for 35% of the Bitcoin hash rate.

Cities such as Beijing and Zhejiang are also included on the list. The cost of electricity and labor in the two regions is high, as seen by their low overall hashrate share.

The absence of Sichuan, however, does not necessarily mean that miners in the United States or Europe can suddenly increase their share. Xinjiang, Mongolia, and Yunnan are lush, resembling Sichuan.

China’s significance in the mining area is due to a combination of reasons, including technical know-how, low labor costs, and sheer dominance in the industry.

Furthermore, the country is promoting blockchain regulation, investment, research, and infrastructure. This implies that cryptocurrencies may be subject to similar legislation and policies sponsored by the government.

Meanwhile, China continues to advance its digital currency initiative, which, according to CryptoSlate, may be larger than previously thought.

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