|
The Sichuan Supervision Office of the National Energy Administration held a research symposium on "virtual currency" on June 2, 2021. This symposium has become the focus of attention in the crypto industry. As of the time of writing, the official results of the symposium have not been released, and the "Sword of Damocles" of the crypto mining farm is still hanging over its head.
At present, with the global encryption environment uncertain, the cryptocurrency market is fluctuating and sideways. Since May, China has intensively introduced policies to crack down on encryption mining, and the price of Bitcoin has plummeted, and the computing power has declined, which has significantly affected the income of miners.
Sichuan encryption policy changes remain unclear
In recent years, Xinjiang and Sichuan, as the largest gathering places for crypto mining farms in the world, once accounted for more than 80% of the world's mining computing power. According to previous years, in June, when the flood season came, most of the crypto mining farms in Xinjiang moved to Sichuan, and Sichuan became the world's largest concentration of computing power. In 2021, crypto mining farms have to take policy requirements into consideration. Sichuan is no longer the main migration site, and the mines in the mountains are being transferred. The China Times previously reported that many mines are preparing to actively move to countries such as Kazakhstan, Canada, and even turbulent Iran.
In this context, the symposium held in Sichuan naturally attracted much attention, and Sichuan's attitude is related to whether there will be a historic shift in Bitcoin computing power. It is reported that at this symposium, State Grid Sichuan Electric Power Company and Sichuan Energy Investment Group reported on the situation and relevant suggestions of virtual currency "mining" in their respective supply areas, and the impact of shutting down virtual currency "mining" on the amount of hydropower abandoned in Sichuan this year; Sichuan Power Trading Center reported on the situation and relevant suggestions of big data enterprises participating in market transactions in the hydropower consumption demonstration area; and power sales companies reported on the situation and relevant suggestions of big data enterprises participating in market transactions as agents.
A relevant person told our reporter: "During this symposium, relevant departments reported on the current situation of hydropower use, and decision makers and participants learned about it. However, there is no definite tendency or specific content for the further implementation of subsequent policies."
However, Hello EOS founder Zi Cen said on social media: "The symposium has been held, and the attitudes expressed were very positive. There are no details yet. As I said, because there is a demand for hydropower consumption, Sichuan's decision will be much more moderate and friendly. Xinjiang and Inner Mongolia are because they do not meet the carbon neutrality standards."
Industry insiders analyzed to our reporter that there are currently more than 600 medium and large mining farms in Sichuan, most of which have more than 2,000 mining machines. It is estimated that a mining farm with 20,000 mining machines will have to pay more than 100 million yuan in related fees each year, and there are many mining farms with more than 20,000 mining machines. Once shut down, during the flood season, the electricity converted from these green energies in Sichuan will become abandoned hydropower.
The large amount of electricity consumed has caused power outages in some areas, which has also become a point of criticism for Bitcoin mining. According to a report from the Sichuan Power Trading Department, the electricity consumption of Bitcoin mining is expected to reach 11.3 billion kWh in 2021. During the dry season, the pressure is also quite high.
The above-mentioned industry insider said: "After this crackdown, it is an inevitable trend for Bitcoin hash rate to disperse out of China. After some mining farms withdrew from Sichuan, Xinjiang and Yunnan, some of the remaining mining farms are also relatively powerful. The number of these mining farms will not have a great impact on electricity and carbon neutrality, and they can also absorb abandoned hydropower during the flood season, which is the best result."
Bitcoin miners’ income plummets
Due to the sharp drop in Bitcoin prices in May , Bitcoin miners' income dropped sharply. According to OKLink data, Bitcoin miners' income in May was 1.466 billion US dollars, a decrease of 14.09% from the previous month. However, thanks to the increase in on-chain fees, Ethereum miners' income was 2.323 billion US dollars, an increase of 45.86% from the previous month.
According to BTC.com data, since May 13, the average computing power of the Bitcoin network has dropped from 179.25 EH/s to 150.48 EH/s; the difficulty of the entire network has dropped from 25.05 T to 21.05 T, a decrease of more than 15%; it is estimated that the difficulty is expected to drop to 18.49 T next time, a further decrease of 12.14%. Our reporter noticed that on June 4, the computing power of many major mining pools was declining; Antpool dropped by 6.71%, 1THash dropped by 3.31%, and BTC.TOP dropped by more than 15%.
Li Yun, a senior miner, told our reporter that the profitability of Bitcoin mining is relatively complex and is closely related to the price of Bitcoin, mining difficulty, total network computing power and transaction fees. Handling fees and block rewards are the most important components of miners' income, and network computing power depends on whether the mining machine is running. Overall, the price of Bitcoin and mining computing power show an inverse trend. As the difficulty of mining decreases, the computing power also decreases simultaneously. Since the halving of Bitcoin in May 2020, with the rise in prices since 2021, Bitcoin miners seem to have made up for the halving of the number of Bitcoins through prices.
"The main reason why Bitcoin miners' income decreased by more than 14% in May was due to the plummeting Bitcoin price. Previously, the Bitcoin price reached around US$69,000, and miners' income was far more than the income before the halving on May 21, 2020. The number of Bitcoin mining has been halved, but the price has more than increased by 7 times. It can be said that Bitcoin miners have made a lot of money this year. Even if the price plummets, only the income has decreased, and the profitability is still very high." Li Yun explained to our reporter.
Li Yun said: "In May, due to factors such as mine relocation, power restrictions, the postponement of the southwest rainy season, and policy suppression, the computing power plummeted. Many mines suspended operations or limited operations, which had a great impact on the income of Chinese miners. My mining machine has hardly been turned on all day since mid-May. Generally, it is from 10 am to 7 pm, and the mining machine has become an office worker. Sichuan's policies are not clear yet, and there may be great variables in June. If the price of Bitcoin continues to fall, it is foreseeable that the income of miners will continue to decrease."
It is understood that the fluctuation of miners' income is basically consistent with the fluctuation of currency prices. For each block mined in 2019, the system will reward miners with 12.5 bitcoins at that time. It is estimated that the total income of global miners in 2019 exceeded US$5.2 billion. The highest month in 2019 was July, and the total income of global miners was only US$657 million. July was also the month with the highest price of the whole year. The lowest month was only US$196 million. Since 2021, after the mining reward was halved, the global miners' income in April was as high as US$1.68 billion. Therefore, the halving of Bitcoin mining rewards is also a mixed blessing for miners. |
