The wet season is approaching, but Chinese miners will face greater supervision and lack of power

It seems that because of the influence of the content of Nature magazine, all parts of China have begun to be instructed by Beijing to solve the problem of high energy consumption in Bitcoin mining. In the context of carbon neutrality, the regulatory pressure faced by Chinese miners may be greater in the future.

The annual wet season is approaching, but Chinese miners are facing potential pressure from supervision. Although the Chinese government has swayed its attitude towards the crypto mining industry, the pressure this year may be relatively greater. Wu said that the blockchain has learned that due to power shortages in the Southwest and Sichuan regions, the Northwest region will face greater pressure due to carbon neutral policies.

Northwest China faces carbon neutrality and high energy consumption issues

On April 7th, “Nature Magazine” published research from Tsinghua University and the Chinese Academy of Sciences, pointing out that China’s Bitcoin mining will reach a peak of about 297 trillion watt-hours in 2024 and will generate about 130 million metric tons of carbon emissions. This value exceeds the annual greenhouse gas emissions of all medium-sized European countries (such as Italy or the Czech Republic). The carbon emissions per unit GDP of the Bitcoin industry far exceed the average industrial carbon intensity of China. Bitcoin mining will become China. Obstacles to achieving carbon neutrality goals.

Previously, Wu said that the blockchain has pointed out that considering the top academic backgrounds of Nature Magazine, Tsinghua University and the Chinese Academy of Sciences, this paper may have an impact on China’s energy decision-making level and even higher levels.

Moving forward, in a document issued by the National Development and Reform Commission on February 2, 2021, Inner Mongolia is the only province that has not been completed in the implementation of the dual control measures for total energy consumption and intensity in 2019 and the completion of the target. On February 25, the official website of the Inner Mongolia Development and Reform Commission announced that in accordance with the work arrangement for dual control of energy consumption, it is required to completely clean up and shut down virtual currency mining projects, and all exit before the end of April 2021.

On April 21, at the second Bitdeer “Feng Shui Festival”, Wu Jihan, chairman of Bitdeer, said that carbon neutrality has a long-term impact on the industry and reducing carbon emissions is a global trend. Mining should not be lucky. In addition, China’s mining industry and blockchain are facing a more complicated situation. As (Zhou Xiaochuan) stated earlier, blockchain finance always has to answer a question, which is what is the use for the real economy.

Southwest China and Sichuan are facing power shortages

Although the problem of high water deadline power is normal, this year’s power shortage may be even more severe. Due to the economic recovery and high temperature weather after the epidemic, Sichuan’s electricity load has increased rapidly since May, but the water supply has been relatively short and the year has been dry by 30%. The supply of electricity and coal are in short supply and coal prices are soaring. Big data users have been temporarily restricted in electricity. On the other hand, the relocation of a large number of miners under strict investigation in Inner Mongolia has aggravated the shortage of mining power in Sichuan.

On May 16th, due to lack of power, power curtailment, inspections and other reasons, Sichuan required the big data center to implement temporary power curtailment, and the computing power of the entire network dropped sharply. According to data from BTC.com, as of 9 am on the 17th, Ant Pool fell 17.8%, Binance Pool fell 14.5%, Huobi Pool fell 23.7%, and other mainstream mining pools all fell 6%-8%.

On May 9, Yunnan Provincial Energy Administration and Yunnan Energy Supervision Office also organized key power generation companies to hold a symposium. The meeting requested that all power generation companies should do everything possible to increase the number of days available for coal storage, resolutely avoid coal shortages, strengthen equipment operation and maintenance and personnel reserves, strictly control unplanned outages of units, and do a good job in communication and cooperation with local governments, coal supply and transportation companies , To form a joint force to ensure the stable supply of electricity.

Local governments began to investigate the issue of mining power consumption

Due to the steadily increasing price of Bitcoin since the beginning of this year, the society’s attention to the industry has risen sharply. In particular, the recent popularity of altcoins has led to a large number of new users entering the market, and the attention of the regulatory authorities has also increased significantly. Xinhua News Agency issued an article on May 15 criticizing the chaos in the virtual currency market.

According to The Paper, in April, the Beijing Municipal Bureau of Economics and Information Technology issued the “Urgent Notice Regarding the Data Center Involving Bitcoin and Other Encrypted Currency Mining Business in Our City Data Center.” The relevant situation of cryptocurrency mining such as coins will be sorted out. If relevant units are involved in related businesses, they will feed back relevant information such as the electricity consumption and total energy consumption ratio of the mining business in the past year before 12:00 noon on April 28. The Beijing Bureau of Economic and Information Technology replied to The Paper on the afternoon of April 29, stating that the notice was indeed issued by the bureau, mainly from the perspective of the types of services carried by the data center and the energy consumption, and it is the normal business work of the bureau.

Wu said that the blockchain has learned that similar investigations are still being carried out in various provinces and cities across the country. Data or statistics are sent to relevant central departments to make decisions about the next action. Logically, the most severe action may be to prohibit all mining activities, but this is unlikely, because Bitcoin is defined as a legal virtual commodity, and mining itself is not illegal. A more reasonable possibility is to require the gradual shutdown of related industries from the perspective of high energy consumption. The ideal situation is that the decision makers remain open and wait-and-see. But in general, due to the carbon neutral policy and the “political requirements for unqualified high-energy, high-emission projects to be resolutely taken down”, the uncertainty of domestic mining is increasing rapidly.