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At noon on June 19, a miner lamented on Weibo: "8 million loads in Sichuan were collectively shut down at 0:00 today. The most tragic and spectacular scene for miners in the history of blockchain is about to happen. How far-reaching the impact will be will only be known in the future."
According to Caixin.com, on June 18, a document entitled "Notice on Cleaning Up Virtual Currency "Mining" Projects" issued by the Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Bureau appeared in multiple WeChat groups. The screenshot of this document gave a clear time for the cleanup, requiring that the projects that had been investigated and reported be screened, cleaned up and shut down by June 20, and that the self-inspection and self-correction of the suspension of power supply be reported to the Development and Reform Commission by June 25. It also listed a detailed list of 26 suspected virtual currency "mining" projects that State Grid had investigated and reported to the state.
After the document was leaked, people in the industry called it "the biggest mining disaster in Chinese history." For a time, anxiety permeated the entire mining industry. This was also the last time Sichuan, known as China's largest virtual currency mining center, fell after Inner Mongolia, Xinjiang, Qinghai and Yunnan.
Many places have closed virtual currency mining, and carbon neutrality is the main reason. In the global Bitcoin mining network, Chinese miners have always dominated. According to a data released by the Cambridge Center for Emerging Finance (CCAF) last year, Chinese miners accounted for 65.08% of the world's total mining power. Among them, miners are mainly located in Xinjiang, Sichuan, Inner Mongolia and Yunnan, but the proportion will change with the season. Source: https://cbeci.org/mining_map
Generally, virtual currency mining is concentrated in Xinjiang and Inner Mongolia, which are rich in thermal power, and Yunnan, Sichuan, Guizhou, etc., which are rich in hydropower. However, due to energy consumption issues, the thermal power mining industry used in Inner Mongolia and Xinjiang is facing the risk of being cleared out. Relatively speaking, the hydropower used in Sichuan and Yunnan is relatively clean and cheap, which is why some Sichuan miners and mine owners still have a fluke mentality in Sichuan after being cleared out in Inner Mongolia, Xinjiang and other places.
However, as relevant national departments have repeatedly announced the crackdown on virtual currency mining, even mining based on hydropower energy has been withdrawn. Yesterday afternoon, the relevant departments of the People's Bank of China interviewed some banks and payment institutions such as Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Postal Savings Bank of China, Industrial Bank and Alipay (China) Network Technology Co., Ltd. on the issue of banks and payment institutions providing services for virtual currency trading speculation. They are required to fulfill their obligations to identify customers and not provide products or services such as account opening, registration, trading, clearing and settlement for related activities. All institutions should comprehensively investigate and identify the capital accounts of virtual currency exchanges and over-the-counter traders, and promptly cut off the payment link for transaction funds.
As early as May 18, the three associations issued a notice to warn against the risks of virtual currency trading speculation. Soon after, the Inner Mongolia Development and Reform Commission issued the "Notice on the Establishment of a Reporting Platform for Virtual Currency "Mining" Enterprises", comprehensively cleaning up and shutting down virtual currency "mining" projects; on May 21, the State Council Financial Stability and Development Committee announced a crackdown on Bitcoin mining and trading; Qinghai and Yunnan issued a cleanup and rectification of virtual currency mining projects. It can be said that this time the state's rectification of virtual currency has been a comprehensive and severe crackdown from the virtual currency payment end involved at the upper level to the mining behavior of miners at the lower level.
The full crackdown on virtual currency mining, mainly Bitcoin, is, on the one hand, to achieve the goal of carbon neutrality. In 2020, at the United Nations General Assembly, China pledged to strive to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. In order to achieve this environmental protection goal, controlling energy consumption and reducing thermal power have become important tasks. Cai Kailong, a senior researcher at the Institute of Financial Technology of Renmin University of China, said in an interview that because of the goal of carbon neutrality, mining is not only detrimental to the environment for China, but also consumes electricity. With increasingly strict supervision, private mines are actually difficult to exist. On the other hand, this severe crackdown is actually an official statement on Bitcoin mining and trading. Domestic officials have never recognized virtual currency trading represented by Bitcoin. With high volatility and no perfect legal supervision, virtual currencies in the gray area hide huge financial risks and security risks.
Continue to wait and see or go overseas? Miners are experiencing a difficult choice. Chinese miners are now facing a situation of "no electricity to mine". A small number of individual miners have already resold their mining machines, while some mine owners with stronger capital have chosen to continue to wait and see domestic policies, hoping that more lenient policies will be introduced later, while others have chosen to directly move their mines overseas, especially to Central Asia and North America where electricity costs are relatively low.
Miami Mayor Francis Suarez said Miami is open to Chinese Bitcoin miners. In an interview, Suarez talked about the focus on the mining industry and the use of clean energy. Suarez claimed that he has not personally received any calls from Chinese miners who are willing to settle in Miami, but he hopes to support the mining activities of willing miners by increasing the city's basically unlimited supply of cheap nuclear energy. Although he also admitted that the current price is still higher than that in China, he also promised to work hard to reduce costs.
"We want to make sure our city has a chance to compete. We're talking to a lot of companies and we're telling them directly, 'Hey, we want you to come here.'" Compared to other parts of the United States, Miami has cheaper electricity and an open and friendly attitude towards virtual currency mining. The U.S. Bureau of Labor Statistics reports that the average electricity cost per kilowatt-hour in Miami is 10.7 cents (about 0.68 yuan), while the national average is 13.3 cents (about 0.85 yuan).
He is also considering a range of other incentives to attract bitcoin miners to Miami, such as establishing a corporate zone for bitcoin mining activities. The zone would offer tax breaks, infrastructure incentives and reduced regulations to companies that move in, hoping that these incentives and concessions would encourage investment and job creation.
In addition, after the Sichuan mining machines were collectively cut off from power, Paraguayan Congressman Carlitos Rejala retweeted a video of Chinese miners bidding farewell to the mining machines on Twitter, saying: "(Miners) Hello, Paraguay is waiting for your arrival. It is reported that Paraguayan congressmen plan to submit a Bitcoin bill next month.
At present, due to factors such as migration costs, the impact of the epidemic, and the uncertainty of overseas policies, most miners have not actually migrated directly overseas. Even after the Sichuan clearance incident, the vast majority of miners are still anxiously waiting and watching. "The entire mining industry is now very anxious. The so-called overseas wave is actually inaccurate. There is no overseas wave yet, and overseas migration is by no means easy. Now we just have to wait and see whether the policy will be relaxed." A miner said in an interview with ChainDD.
If domestic miners begin to move overseas on a large scale in the future, will China, which previously dominated the global Bitcoin computing power, lose its Bitcoin accounting rights? Brandon Avanaghi, who worked as a security engineer at the cryptocurrency exchange Gemini, said that in the coming months, we can expect to see a dramatic change in the hash rate. Avanaghi pointed out that the hash rate will continue to decline in the coming months, and 50% to 60% of Bitcoin's hash rate will eventually leave China and most likely go to Texas, becoming a new industry in the United States.
It is worth noting that on May 25, when the country was under high pressure to crack down on Bitcoin mining, Musk began to form the Bitcoin Mining Council with North American Bitcoin miners to increase energy consumption transparency and accelerate sustainable activities worldwide, aiming to standardize the disclosure of energy consumption and seek to achieve environmental, social and governance goals. Chen Weixing, founder of PanCity Capital and Kuaidi Taxi, pointed out that “Bitcoin mining was just a way for Satoshi Nakamoto to encourage users to participate in bookkeeping when he designed the system, not mining. If Bitcoin succeeds, this so-called “mining” is the financial bookkeeping right in the digital world, which will evolve into a power similar to the enhanced version of Swift. This power is not only responsible for clearing reserve currencies, but also for clearing most of the core assets of mankind…”
As Avanaghi said, there will be a dramatic shift in global Bitcoin computing power in the future. As domestic regulatory policies become increasingly stringent, if China begins to go overseas, it may lose its dominance over Bitcoin computing power, and related industrial technologies such as chips, mining machines and mining pools will also be taken overseas.
Finally, I would like to borrow the words of Professor Liu Changyong: "We should not forget that Bitcoin mining has brought huge income, created jobs, and helped the country to fight poverty. Policymakers, power companies, and Bitcoin miners should work together to solve this problem. This is a win-win deal for everyone." (Golden Finance) |
