Wu said weekly mining news: domestic energy shortages lead to intensified regulation and overseas mining companies are hoarding coins 0927-1010

Wu said author | Colin Wu

Editor of this issue | Colin Wu

Summary of this week: The domestic energy and electricity shortage may lead to the intensification of strict inspections on mining projects in various regions. For example, idle mining machines were seized in Inner Mongolia, and more than 4,000 mining IPs were found in Jiangsu, which caused great controversy. Bitmain announced that it would stop shipping to mainland China. In the future, the production, manufacturing and research and development of mining machines may be moved to Southeast Asia and the United States. The winter power shortage in Kazakhstan has begun to ferment its impact on the mining industry. The trend of mining companies hoarding coins in North America has attracted attention. Mining companies are not only mining, but also hoarding coins to increase the company's market value (similar to MicroStrategy).

1. Antminer: Stop shipping to mainland China from October 11. Wu said that according to Bitmain's official WeChat account, Bitmain announced that it will stop shipping Antminers to mainland China (excluding Hong Kong and Taiwan) from October 11, 2021. For mainland customers who have purchased forward products, our staff will contact them and provide alternatives. In addition, in response to the Chinese government's carbon neutrality policy, Bitmain has completed several batches of carbon index procurement, and the indicators mainly come from clean energy power generation projects in Yunnan, Xinjiang and other places in China.

2. Xinhua News Agency: 10,100 mining machines seized in Bayannur City, Inner Mongolia. Wu said that according to the Xinhua News Agency client Hohhot on September 27, recently, the Development and Reform Commission of Bayannur City, Inner Mongolia Autonomous Region and other relevant departments received reports from the masses that a warehouse full of virtual currency "mining" equipment was found in the Small and Medium Enterprises Entrepreneurship Park of the Economic Development Zone of Bayannur City, and 10,100 "mining machines" were seized. Upon investigation, these "mining machines" were foreign virtual currency "mining" equipment, and the on-site inspection showed that the power consumption was 1,104 kWh. So far, Inner Mongolia has cleared and shut down 45 virtual currency "mining" projects, which can theoretically save 6.58 billion kWh of electricity per year, equivalent to about 2 million tons of standard coal.

3. Spark Mining Pool announced the suspension of all domestic and foreign services and the shutdown of all domestic and foreign servers. Wu said that the Spark Mining Pool issued an announcement on September 27, saying that in response to regulatory policy requirements, the Spark Mining Pool has stopped the access of new users in mainland China on September 24, 2021 (UTC+8). For existing users in the mining pool, it is planned to complete the closure of all domestic and foreign Spark Mining Pool businesses at 20:00 on September 30, 2021 (UTC+8) on the premise of ensuring the safety of user assets. All domestic and foreign users are requested to move out before this. The specific withdrawal details will be notified to users through announcements, emails, station letters, etc. Spark Mining Pool is currently the largest Ethereum mining pool. Spark Mining Pool staff said that all domestic and foreign servers will be shut down.

4. Wu said that according to the announcement of Alibaba International Station, based on the provisions of relevant laws and regulations, as well as the instability of laws and regulations on virtual currencies and virtual currency-related products in various international markets, after evaluation by the platform, the platform will prohibit merchants from selling virtual currency mining products on the basis of banning the sale of virtual currencies such as Bitcoin, Litecoin, Biocoin, Quarkcoin, and Ethereum. This announcement was made public on September 27, 2021 and will take effect on October 8, 2021. As early as 2014, Taobao and others had banned the sale of mining machines.

The virtual currency mining machine products that are banned from sale include but are not limited to: Bitcoin mining machines and other hardware and software used to obtain related virtual currencies; tutorials, strategies and software for obtaining virtual currencies, such as mining tutorials. At the same time, the platform will also close two categories, one of which is Consumer Electronics>Blockchain Miners>Blockchain Miner Accessories, and the other is Consumer Electronics>Blockchain Miners>Blockchain Miners. Mining machine products under other categories are not allowed to be sold.

5. China Discipline Inspection and Supervision News: "Mining" has aggravated the local power shortage. Wu said blockchain learned that China Discipline Inspection and Supervision News interviewed Guo Yungao, Secretary General of the Waste Power Generation Committee of the China Environmental Protection Federation and Secretary General of the Energy Storage Equipment Technology Committee of the China Electric Power Technology Market Association, and published it on September 29. The subheading of the article paragraph is: Some regions blindly launched "two high" projects, which to a certain extent affected the power supply, and the huge energy consumption of "mining" projects aggravated the local power shortage."

6. Jiangsu Provincial Communications Administration investigated 4,502 IP addresses involved in virtual currency "mining". Wu said that on October 8, the official website of Jiangsu Provincial Communications Administration stated that recently, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security and other departments issued a notice to strengthen the supervision of the entire industry chain of virtual currency "mining" activities, and strictly prohibit virtual currency "mining" activities in the name of data centers. Jiangsu Provincial Communications Administration attaches great importance to it and comprehensively investigates the virtual currency "mining" activities in our province. Monitoring found that the export traffic of the mining pools carrying out virtual currency activities in our province reached 136.77Mbps, and the total number of Internet IP addresses involved in "mining" was 4,502, consuming computing resources exceeding 10PH/s and consuming 260,000 degrees/day of energy. Taking Ethereum and Bitcoin, which have more virtual currency "mining" activities in the province, as an example, the cities with more "mining" are Suzhou, Xuzhou and Nanjing. Judging from the ownership and nature of IP addresses, those belonging to party and government agencies, universities and enterprises that were invaded and used to carry out virtual currency "mining" accounted for about 21%. In the next step, the Provincial Communications Administration will continue to conduct analysis on the virtual currency "mining" situation, and further cooperate with relevant departments to form a "multi-dimensional, multi-level" disposal system, deal with relevant websites and mobile applications in accordance with the law, and cooperate in tracing and cracking down on illegal virtual currency transactions.

7. According to Cointelegraph on September 30, Iranian authorities discovered cryptocurrency mining equipment in the basement of the Tehran Stock Exchange building during a surprise inspection. The exchange initially denied the existence of mining machines, saying that the equipment was part of a research project. Executive Vice Director Beheshti Sarsht later stated that the company should be held responsible for its actions. Currently, its CEO Ali Sahraee has resigned.

8. Wu said that according to Cointelegraph, after implementing a ban on cryptocurrency mining on May 26, 2021, the Iranian government will allow licensed cryptocurrency miners to resume operations today.

9. Wu said that according to Kazakhstan Today, Kazakhstan's Minister of Energy Magzum Mirzagaliev told local media this week that electricity consumption in 2021 increased by 7% compared with last year, and the surge in demand was mainly due to the increasing number of data centers dedicated to cryptocurrency mining. He emphasized that "this is a very big increase", and the activities of crypto miners now have no significant positive impact on socio-economic indicators. Mining consumes cheap electricity generated in Kazakhstan, but the mined cryptocurrencies are usually sold elsewhere, and profits are accumulated abroad.

However, he said that Kazakhstan needs to develop its crypto mining industry and expressed confidence in the development of the industry, which has "very good opportunities" and emphasized the country's potential to expand the use of renewable energy. The ministry has prepared several recommendations on how to deal with power shortages caused by miners. These measures include limiting the power consumption of existing mining data centers and suspending the approval of new crypto mining farms. A study released by the University of Cambridge this year showed that Kazakhstan's share of global Bitcoin mining increased sixfold in less than two years. Kazakhstan now ranks third in the world by cryptocurrency mining volume. In July, the government decided to impose a surcharge on miners' electricity use, but this did not prevent the influx of mining companies.

10. Wu said that according to bitcoincom, the Kyrgyz government recently revised electricity prices for different consumer groups and increased the rates for crypto mining companies to purchase electricity. These changes are part of the medium-term electricity tariff policy (2021-2025) approved by the country's cabinet. "Mining entities (cryptocurrency)" are one of the 14 groups of end users affected by the revision. In the remaining four years of the new tariff policy coverage period, prices will be adjusted annually to reflect the average level of annual inflation.

11. Wu said that according to the Canadian Broadcasting Corporation, Alberta's provincial utilities commission has proposed to impose a fine of more than $7.1 million on a Bitcoin mining power plant for unlicensed mining at two locations in the province. Vancouver-based Link Global installed four 1.25 MW gas generators at a site in Sturgeon County, about 10 kilometers northwest of Edmonton, last year. The generators draw power from dormant natural gas wells to mine cryptocurrencies. The company did not notify neighbors, the county, or the Alberta Utilities Commission.

12. Wu said that he learned that the North American mining company Marathon announced that it produced 1,252.4 newly minted bitcoins in the third quarter of 2021, an increase of 91% month-on-month, and produced 340.6 newly minted bitcoins during September 2021, increasing its total bitcoin holdings to approximately 7,035.

13. Wu said that Riot Blockchain announced that it produced 406 BTC in September, an increase of about 346% from its production of 91 BTC in September 2020. As of September 30, 2021, Riot holds about 3,534 BTC, all produced by its self-mining business. The company currently has 25,646 mining machines with a computing power of 2.6E.

14. Wu said that Ebang announced its financial report for the first half of 2021, with total net income of US$18.3 million, an increase of 65.69% over the same period last year, and a net loss of US$4.26 million in the first six months. It plans to vigorously develop financial technology (FinTech) business, while steadily carrying out the research and development and sales of Bitcoin and other cryptocurrency mining machines such as Litecoin, Dogecoin, etc., and has started the preliminary preparations for the construction of mines in North America and Europe.

15. Wu said that according to the block, several publicly listed BTC mining companies in North America have hoarded a total of 20,459 BTC, with a current market value of more than $1.1 billion, excluding companies such as Cleanspark, BIT Digital and Greenidge that do not disclose global production in their balance sheets. The latest public monthly production data shows that Riot, Marathon, Bitfarms, Hut8, Greenidge, Argo and HIVE mined a total of 6,463 BTC in the third quarter, accounting for about 7.5% of the total block rewards.

16. Wu said that Powerbridge Technologies, located in Zhuhai, announced that it has completed the deployment of 2,600 high-performance mining machines in Hong Kong, including 600 BTC mining machines with a computing power of approximately 60PH/s and 2,000 ETH mining machines with a computing power of approximately 1,000GH/s.

17. According to Chain News, Bitcoin mining company CleanSpark announced that it will transfer all of the company's Bitcoin computing power of over 1EH/s to Foundry Digital's North American mining pool, and plans to continue deploying mining machines to achieve the goal of reaching 2EH/s computing power by the end of 2021 and 3.2EH/s by the fall of 2022.

CleanSpark announced in April that it had purchased more than 20,000 bitcoin mining machines, and in August it spent $6.6 million to acquire its second data center in Georgia. In September, the company announced that it would invest $145 million to transform the data center into a carbon-neutral mine.

18. According to Chain News, HIVE Blockchain, a listed mining company, announced its first quarter results ending June 30, 2021. The total revenue from digital currency mining in the first quarter was US$37.2 million, up 466% from the same period last year and 11% from the previous quarter. Net income reached a record high of US$18.6 million, up from US$1.8 million in the same period last year and US$4.3 million higher than the previous quarter. Gross profit from mining expanded from US$2.6 million last year to US$31 million, up US$3.3 million from US$27.7 million in the previous quarter. HIVE Blockchain mined 225 bitcoins and more than 9,700 Ethereums in the quarter.

19. Wu said that according to blockchain.com, the difficulty of Bitcoin mining was increased by 4.71% again at block height 703584 at 7:35 this morning. This is the sixth consecutive increase since July 31. The difficulty after adjustment is 19.89T.

According to the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" issued by the central bank and other departments, the content of this article is only for information sharing and does not promote or endorse any business or investment behavior. Readers are requested to strictly abide by the laws and regulations of their region and not participate in any illegal financial behavior. Wu said that the content is prohibited from being reproduced or copied without permission, and violators will be held accountable.

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According to the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" issued by the central bank and other departments, the content of this article is only for information sharing and does not promote or endorse any business or investment behavior. Readers are requested to strictly abide by the laws and regulations of their region and not participate in any illegal financial behavior. Wu said that the content is prohibited from being reproduced or copied without permission, and violators will be held accountable.