Domestic virtual currency mining may be completely shut down: some are still waiting and some are preparing to go to sea

  When Sichuan, the “large hydropower mining province,” also raises the “clearance flag”, virtual currency mining may truly withdraw from China.

  According to a report by The Paper on June 18, the relevant departments of Sichuan Province recently issued a notice requiring power generation companies to conduct self-examination and self-correction, immediately stop supplying power to virtual currency "mining" projects, and fully implement national clean-up requirements.

The notice also requires that each city (state) government immediately conduct a dragnet investigation, and must immediately shut down virtual currency "mining" projects found in the investigation.

It is strictly forbidden to approve virtual currency "mining" projects under various names.

  Although Inner Mongolia, Qinghai and other places have begun to close virtual currency mining projects before, because compared with these provinces that use thermal power mining, Sichuan mining uses relatively cleaner hydropower, and the use of hydropower mining can also solve the local problem. As a result of the problem of hydropower consumption, local miners in Sichuan still had "illusions" in their hearts.

  The promulgation of the Sichuan Clearance Policy, on the one hand, shows the domestic determination to clear away virtual currency mining, and on the other hand, it also broke the miners’ “last fantasy”.

  "China's clearing and retreat is to clean up the source. The original intention may be mainly to consider carbon emissions, but the effect of doing so may be better than expected. Whether it is power resources, economic resources, scientific and technological resources, and social environmental resources, unnecessary waste has been avoided." Wang Zhicheng, associate professor of Peking University Guanghua School of Management, told The Paper.

Reasons for the retreat: from violating carbon emissions to preventing and controlling financial risks

  The withdrawal of virtual currency mining first started in Inner Mongolia, one of the main reasons is the energy consumption of thermal power.

  On February 25, in order to complete the "14th Five-Year Plan" Energy Consumption Double Control Goal and Task of the Inner Mongolia Autonomous Region, the Inner Mongolia Autonomous Region Development and Reform Commission issued the "Guarantee Measures for Ensuring Completion of the "14th Five-Year" Energy Double Control Goal and Tasks (Draft for Comment )", proposed to completely clean up and shut down virtual currency mining projects, and all exit before the end of April 2021, and it is strictly forbidden to build new virtual currency mining projects.

  Affected by this, mining machines in Inner Mongolia began to migrate to Sichuan, Yunnan, where hydropower is sufficient, and Xinjiang, where thermal power is sufficient.

Especially in Sichuan, which has the most abundant hydropower, mine owners in Sichuan once revealed to The Paper that they could receive 10 calls from miners in Inner Mongolia a day to ask if there is any load.

  As a result, the energy consumption of virtual currency mining has caused heated discussions.

A paper published by scholars from the Chinese Academy of Social Sciences and Tsinghua University in Nature Communications on April 6 pushed this topic to a climax.

The paper stated that if there is no appropriate interventions and feasible policies, intensive Bitcoin mining will likely undermine China's emission reduction efforts.

  Guan Dabo, one of the authors of the paper and a professor in the Department of Earth System Sciences of Tsinghua University, said in an interview with The Paper that from a macro-social and economic perspective, the Bitcoin industry has a limited role in promoting the existing financial system and social process.

He emphasized that, like Bitcoin or other financial products, and even all emerging industries in the future, they must have the green attributes of carbon reduction, low carbon and even zero carbon.

  On April 27, the Beijing Municipal Bureau of Economics and Information Technology issued a notice requesting to sort out the relevant circumstances involving the mining of cryptocurrencies such as Bitcoin in the bearer business of the Beijing data center.

The Beijing Bureau of Economics and Information Technology once replied to The Paper that the notice mainly sorts out the types of services carried by the data center and energy consumption, and is the normal business work carried out by the bureau.

  On May 18th, the Inner Mongolia Development and Reform Commission announced the establishment of a virtual currency "mining" corporate reporting platform. A person close to the Inner Mongolia Development and Reform Commission previously revealed to The Paper that the current situation of Inner Mongolia's virtual currency mining projects has achieved remarkable results, which is conducive to real data. The establishment of the center in Inner Mongolia is conducive to the smooth implementation of carbon peak and carbon neutral policies.

  Just three days later, the State Council’s Financial Stability and Development Committee held a meeting on May 21 to demand resolute prevention and control of financial risks, crack down on Bitcoin mining and trading, and resolutely prevent individual risks from being transmitted to the social field.

This also means that the policy of shutting down virtual currency mining projects has risen from the local level to the central level.

  Since then, various provinces and cities have responded, and the virtual currency mining industry has officially begun to retreat.

  On May 25, the Inner Mongolia Development and Reform Commission issued the "Eight Measures to Resolutely Combat and Punish Virtual Currency "Mining" (Draft for Solicitation of Comments) (hereinafter referred to as the "Draft for Comments"), and put forward different disciplinary strategies based on the eight categories of objects.

  Some people in the industry have pointed out that if it is in compliance with regulations, virtual currency mining will first choose two places in China: the first is Sichuan, because the abandonment of water and the energy support of the park can consume electricity that cannot be delivered.

The second is the Xinjiang Zhundong Economic and Technological Development Zone, because the local coal is on the surface, which is a huge waste of energy if it cannot be used.

  However, on June 9th, it was reported that the Xinjiang Changji Hui Autonomous Prefecture Development and Reform Commission issued the "Notice on Immediately Suspending and Rectifying the Production of Virtual Currency "Mining" Enterprises", requesting the Management Committee of Xinjiang Zhundong National Economic and Technological Development Zone to immediately Order all virtual currency "mining" companies to suspend production for rectification before 14:00 on that day.

  On the same day, the Qinghai Provincial Department of Industry and Information Technology also issued the "Notice on the Comprehensive Shutdown of Virtual Currency "Mining" Projects."

  On June 11, The Paper learned from a miner that the mine hosting mining machines in Yunnan was closed in the morning of the same day, and the mine hosting mining machines in Xinjiang was also closed on the same day.

At the same time, a document entitled "Notice of the Yunnan Energy Administration on Further Strengthening the Power Management of Bitcoin Mining Enterprises" was circulated on the Internet that day. The notice required that the cleanup and rectification of the power consumption of Bitcoin mining companies be completed as soon as possible by the end of June.

  In the face of intensively promulgated policies for the virtual currency mining industry, Sichuan seems to be the "last hope" for the virtual currency mining industry in the eyes of miners.

  On June 2nd, in order to understand the situation of Sichuan virtual currency "mining", the Sichuan Regulatory Office of the National Energy Administration has held a small-scale research symposium to analyze the impact of the shutdown of virtual currency "mining" on the amount of water and electricity in Sichuan this year. .

  Nowadays, the high-profile Sichuan has also begun to retreat, and virtual currency miners and mine owners will face the scenario of "no electricity to dig".

The future: moving overseas?

  "Under the background of global carbon neutral transformation, the most direct impact on Bitcoin's computing power is the most direct effect of the large-scale shutdown and withdrawal of domestic Bitcoin mining companies, but the overall impact is not very large." Ouke Cloud Chain Wang Haifeng, a senior researcher at the Research Institute, told The Paper, “Because Bitcoin nodes are distributed around the world, the closure of local mines will cause new nodes to flow in from other areas around the world. The computing power of the currency will not have a significant impact."

  Wang Zhicheng believes that China has shut down centralized "mining" and not all mining has been stopped. Bitcoin mining should have been implemented with truly idle equipment, so that it can be more fragmented and more decentralized. With these centralized computing power, the system is more distributed and, to a certain extent, more secure.

  Wang Zhicheng pointed out that China is inherently low per capita in terms of energy resources. Even if there is some small-scale centralized mining, it should be in those countries where the per capita share of energy resources is relatively high.

Bitcoin's block time is inherently fixed, and the drastically developed mining computing power is a bit of a rising rhythm, which is originally a problem of internal competition.

  "So I think the development of the industry will only have some short-term impact. After the adjustment, how to operate will continue its due mechanism." He said.

  Gu Yanxi, the founder of Liyan Consulting Company and a researcher in the blockchain and encrypted digital asset industry, also told The Paper that after the ban in China, miners can move to areas where mining is allowed to continue mining, but only need Facing the challenge of conducting business in an unfamiliar business environment.

  "Let’s wait and see, now there’s no place to dig. At the end of the month, if we can’t do it in China, we should find channels to go to sea and find some big companies to cooperate." A miner with mining machines in Yunnan and Xinjiang told The Paper, "Hope It's just a gust of wind. After the limelight, the policy can be relaxed. After all, so much water and electricity are discarded every year, and it is a waste of no need."

  He said that he expects to go to some neighboring Asian countries, but Europe and the United States do not plan to go because it is a "fudge" and "electricity prices are not cheap."

  Another mine owner in Sichuan is also considering going to sea, but he said that he "prefers the United States."

  According to a CNBC report on June 18, the Mayor of Miami, Francis Suarez, stated that the door of Miami is open to Chinese Bitcoin miners.

  Francis Suarez told CNBC that he himself has not received any calls from Chinese miners, but hopes to accept these diaspora miners by promoting the city’s almost unlimited supply of cheap nuclear energy.

  The Paper, News Reporter Ye Yinghe

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