Wu said weekly mining information (20210726-20210801)

Wu Shuo Author | Wu Zhuocheng

Editor of this issue | Colin Wu

1. National Policy

1. Iranian state-owned company Tavanir warns Chinese cryptocurrency miners about entering Iran.

According to Eghtesadnews, Iran's state-owned power generation, distribution and transmission company Tavanir has warned Chinese cryptocurrency miners about entering Iran, arguing that lower electricity costs make Iran attractive to Chinese miners. They are likely to start smuggling mining equipment into the country. However, Iran has stopped all cryptocurrency mining for four months until September 22 due to power shortages in the summer.

2. Kyrgyzstan’s National Security Committee found 118 illegally installed Bitcoin mining machines in private mines

According to China News Service, the National Security Committee of Kyrgyzstan (hereinafter referred to as the National Security Committee of Kyrgyzstan) recently discovered a "mining farm" in a private residence for "mining" Bitcoin. It is reported that the "mining farm" is located in Naryn, Kyrgyzstan. A resident of the city illegally installed 118 Bitcoin mining machines in a private residence to mine digital cryptocurrencies. Due to the current power shortage in Kyrgyzstan, the resident was accused of causing "huge damage" to the power grid. The resident disguised the "mining farm" by installing sound insulation and ventilation facilities.

According to the Kyrgyz National Security Committee, since 2017, the sharp rise in the price of cryptocurrencies in the international market has spawned a large number of "miners" who use Kyrgyzstan's relatively cheap electricity to "mine" Bitcoin in Kyrgyzstan. In view of the power shortage in Kyrgyzstan, the Kyrgyz National Electricity Holding Company stipulated in April 2019 that it would suspend the issuance of relevant documents for Bitcoin "mining" projects.

However, the Kyrgyz National Security Council said that some "mining sites" are still operating in secret. At the same time, the Kyrgyz National Security Council also pointed out that using private small hydropower stations to provide electricity for "mining" activities does not violate the law, and the temporary ban does not apply to this. It is reported that in 2020, the Kyrgyz energy department stipulated that the price of electricity used to "mine" Bitcoin is 2.24 soms (0.17 yuan) per kilowatt-hour.

2. Industry Trends

1. Thailand's second largest broadband operator said it would enter the Bitcoin mining business

According to kaohoon news, Jasmine International, the second largest broadband operator in Thailand, said it would enter the Bitcoin mining business and become the largest Bitcoin mining center in Southeast Asia in 2024. It currently expects to deploy 500 mining machines in the third quarter of 2021 and 5,000 mining machines in early 2022, reaching a computing power of 5 EH before the halving in 2024.

Jasmine International is an information and communications technology company headquartered in Thailand that provides systems integration, outsourcing, and distribution of telecommunications equipment to meet the needs of telecommunications service providers. It is also the second largest broadband operator in Thailand (after True) with over 2 million subscribers.

2. BitMining has deployed 7,849 Bitcoin mining machines in Kazakhstan

On July 28, BitMining (NYSE: BTCM) announced that it would purchase 2,500 new Bitcoin mining machines with a total value of US$6.6 million (approximately RMB 42.57 million) by paying cash. All mining machines are expected to be delivered within a week and are planned to be shipped to Kazakhstan. After the deployment is completed, the company's total computing power will increase by 165 PH/S.

At present, 3,819 Bitcoin mining machines have been deployed in the Kazakhstan data center and have started mining. The total computing power of this batch of mining machines is 172 PH/S; 4,030 Bitcoin mining machines have arrived at the Kazakhstan data center and are waiting for deployment. The total computing power of this batch of mining machines is 121 PH/S; some of the Ethereum mining machines purchased in the early stage have been deployed in non-mainland China areas and have started mining. The total computing power of these mining machines is 86.4 GH/S; the remaining Ethereum mining machines with a total computing power of 4,713.6 GH/S will be deployed before the end of October.

3. As many as 8 Chinese Bitcoin mining companies are looking to relocate operations to Paraguay

According to Bitcoin Magazine, as many as eight Chinese bitcoin mining companies are looking to relocate their operations to Paraguay. The total number is expected to be as high as 500,000 units, and the migration process may take several years. Juanjo Benítez Rickmann, CEO of Paraguayan mining company Digital Assets SA, said that one of the companies is installing 90,000 bitcoin mining equipment. In addition, other unnamed companies have contacted Paraguayan miners.

4. Greenidge Generation will use Bitcoin mining profits to build solar power plants

According to Cointelegraph, Bitcoin mining company Greenidge Generation announced on Thursday that it will use its Bitcoin mining profits in the Finger Lakes region of New York State to transform the Rockwood Mountain base into a solar power plant capable of generating 5 megawatts of electricity to speed up the closure of the nearby coal ash landfill. This new energy source also appears to be used to enhance the power of the company's Bitcoin mine in Seneca Lake, which aims to use 85 megawatts for crypto mining by next year. The mine was previously powered by coal, but now reportedly uses natural gas.

5. Bitmain reported the progress of the divestiture of "Antpool" at the semi-annual shareholder exchange meeting

On July 26, 2021, Bitmain held a semi-annual shareholder exchange meeting. The company's management also informed shareholders of the progress of the divestiture of the former Bitmain mining pool brand "Antpool". After obtaining shareholder approval in the first quarter, all legal matters were completed on May 1. We are currently sorting out some businesses and will complete the relevant actions as soon as possible. After obtaining the support of new shareholders, "Antpool" will independently carry out mining pools and other businesses overseas.

3. Industry Views

1. Compound Legal Director raises concerns about the Digital Asset Market Structure and Investor Protection Act

Compound Legal Director Jack Chervinsky detailed on Twitter the Digital Asset Market Structure and Investor Protection Act proposed by U.S. House of Representatives Representative Don Beyer, raised serious concerns and sparked widespread discussion.

He said: The bill expands the tax law's definition of "broker" to cover almost everyone in cryptocurrency, including non-custodial actors such as miners, forcing them all to use KYC, and if taken literally, it could apply to almost every economic participant in the U.S. crypto industry, including POW miners and POS participants, because "providing services to enable the transfer of digital assets", it may also include a large number of DeFi market participants.

He noted that the bill requires brokers to comply with IRS reporting requirements, most importantly, they must provide customers with 1099 forms and submit them to the IRS (Internal Revenue Service). This will seriously undermine the anonymity of the crypto industry. However, the provision is part of a bipartisan and other popular infrastructure bill that is moving quickly through Congress and has a high probability of passing.

Jack Chervinsky said that after China forced miners to leave China, we can't do the same thing, and the bill will force miners to leave the United States. But the provision has not been finalized and can still be changed. Even if it passes as is, it will not take effect until 2023 at the earliest, so at least we have time to try to revoke it in Congress or the courts. This may be a protracted battle.

2. Li Bai from Pomegranate Mining Pool published an article about the impact of EIP-1559 on Ethereum and Filecoin

Wu said blockchain learned that Li Bai from Pomegranate Mining Pool said that the impact of EIP-1559 on Ethereum is estimated to be the following four points:

1. Gas estimation is more accurate when sending messages, making it easier to grasp the time when messages are uploaded to the chain, and operations such as preemption will be easier.

2. The cost of selfish mining becomes higher, and the destruction of BaseFee is considerable.

3. Miners’ income has declined, and it is difficult to estimate the proportion of miners’ income to the total circulation.

4. The more congested the network is, the more severe the deflation will be, and there is even the possibility of a decrease in circulation.

Filecoin has already implemented EIP-1559. Li Bai summarized the impact of EIP-1559 in Filecoin as follows:

1. BaseFee fluctuates steadily.

2. Selfish packaging still exists: the missing BaseFee is only supplemented, with no additional penalty; however, the selfishly packaged transactions must pay enough gas.

3. After the WindowPoSt address is separated, timely chaining can be guaranteed by setting a reasonable gas.

4. The impact of deflation on FIL: circulation, locked-up volume, and destruction volume: the volume mined by miners accounts for a relatively low proportion of the circulation volume, and the impact is not significant; when the network is congested, consumption can be equivalent to release.

According to the "Risk Warning on Preventing Illegal Fund Raising in the Name of "Virtual Currency" and "Blockchain"" issued by the China Banking and Insurance Regulatory Commission and other five departments, readers are requested to abide by the laws and regulations of their region. The content of this article does not endorse the promotion of any business or investment activities. Investors are requested to raise their awareness of risk prevention. Wu said that the content of the blockchain is not allowed to be reproduced or copied without permission, and violators will be held accountable.