Use Of Electricity For Bitcoin Mining Is Illegal – China!

An announcement today (14th November 2017) by Sichuan Electric Power company in China appears to suggest that electricity used to mine Bitcoin is illegal!

The news came in the form of an article on (source), a rough translation of which can be seen below:

Tencent Finance “front line” Liu Peng

Domestic regulatory requirements to close the bitcoin exchange, the bitcoin upstream of the industry chain – “mining”, also began to be affected.

November 14, Tencent Finance “front-line” learned from the Bitcoin Miner’s Office, Sichuan Electric Power Company has issued a circular that the use of electricity to produce bitcoin is illegal operations, requiring grid-connected hydropower stations need to stop production of bitcoin, or will be Be “to be solved network punishment.”

“Digging” is a jargon in the bitcoin world, which specifically refers to the use of the computing power of the chip to continuously “hash collide” in the blocks generated by the bitcoin system to win the accounting right to obtain the system Bonus bitcoin. This boring and repetitive process is vividly called “mining” in the Bitcoin industry.

In the process of “mining”, the largest expenditure is the amount of power consumed by the initial investment in mining machines and the daily operation of mining machines. In order to reduce production costs, bitcoin mines mostly “live with electricity.” Tencent “Prism” had previously reported that benefiting from the abundant electricity resources in Inner Mongolia and Sichuan, China has the world’s largest bitcoin mine and has a monopoly on the production of bitcoin. A bitcoin mine owner once told Tencent Finance, “Sichuan has the largest amount of water resources in the country. There are thousands of large and small hydropower stations with abundant power. Sometimes, because of over-supply of electricity, some of the water that should have been used to generate electricity We can only let it go, we call it ‘discarded water.’ “Bitcoin saved these” abandoned water. ” The water that would otherwise have been diverted from the hydropower station was used to generate power for bitcoin mines, huge gains were made by hydropower plants, and miners were given the coveted low-cost electricity.

However, with the domestic regulatory tightening of the Bitcoin Exchange and the conflict of interests between power companies and small-scale hydropower stations, the power supply urgently needed by bitcoin mines has gradually been tightened up by local electricity companies. A miners told Tencent Finance, Sichuan, on the one hand, issued a circular at the policy level, requiring no new small hydropower stations; the other hand, the power company is stepping up its acquisition of small hydropower stations to promote the latter’s power grid, bitcoin mine low-cost Electric space increasingly cramped.

The announcement comes less than 2 months after the Chinese government officially banned Bitcoin exchanges in the country. Although these kind of announcements affected the price short term, the Bitcoin price has since risen to even greater highs.

The legitimacy of the news is so far unconfirmed, and from the rough translation it’s difficult to work out exactly what it means for Bitcoin mining in China, a country mining around 70% of the world’s Bitcoin!

It’s unclear how the news relates to other cryptocurrencies such as Bitcoin Cash, Ethereum or NEO, or how the authorities will enforce the laws, if at all! Stay tuned for updates.

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By | 2017-11-14T15:24:56+00:00 November 14th, 2017|Cryptocurrency News|0 Comments

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