Is nuclear power mining more efficient? Crypto mining may shift to areas with excess energy

On May 19, according to official news, the Resource Conservation and Environmental Protection Division of the Inner Mongolia Development and Reform Commission issued the "Notice on Accepting Petitions and Reports on Problems of Virtual Currency Mining Enterprises", comprehensively cleaning up and shutting down virtual currency "mining" projects, and improving the reporting channels for problems of virtual currency "mining" enterprises. In order to solve the problem of "double control of energy consumption", Inner Mongolia has continuously increased the policy intensity of restricting virtual currency "mining".

Recently, Musk has made a series of negative comments about Bitcoin, accusing it of consuming fossil energy, especially coal, which has caused a sharp drop in the market. Some market insiders believe that Musk's discussion of the energy consumption of cryptocurrencies such as Bitcoin may attract the attention of the global elite.

On the other hand, there is a view in the industry that thermal power is stable but easy to cause pollution, and new energy sources such as hydropower, photovoltaics, and wind power are unstable and difficult to store. For the mining industry, downtime means loss of profits. However, nuclear power, which is pollution-free, low-cost, and extremely stable, may be the most suitable form of energy for Bitcoin mining.

In fact, in Eastern Europe, where there is a surplus of electricity, nuclear power may have already begun mining Bitcoin. On May 6, 2020, the Ukrainian Ministry of Energy released a Facebook statement stating that Bitcoin and digital currency mining is a modern and effective way to utilize excess energy. The post stated that due to the national lockdown of the new crown pneumonia, local nuclear power plants have generated a large amount of surplus electricity resources. The acting head of the Ukrainian Ministry of Energy asked the state-owned enterprise Energoatom to study potential methods of using nuclear power generation facilities in the country for Bitcoin mining by May 8.

In addition, countries with excess electricity, such as Russia and Belarus, are also considering using nuclear energy for mining. In September 2017, the governor of the Leningrad region invited cryptocurrency miners to Sosnobyb near St. Petersburg to build an industrial-scale mine at the old Leningrad nuclear power plant. In 2019, the president of Belarus said at a meeting with IT industry representatives that he would develop digital currency mining with the whole country's strength, allow the mining industry to set up factories in the country, and use excess nuclear power to provide electricity for new digital currency mines.

Huobi Research Institute believes that the current mining of cryptocurrencies such as Bitcoin in China is mainly centered around "abandoned electricity", which is actually absorbing excess electricity. Now Eastern Europe and other places have begun to use the "abandoned electricity" of nuclear power plants for mining, which is likely to become a future trend. At this stage, the Bitcoin mining industry has developed into a global industry, and regional policies may be difficult to change the entire industry ecology. Therefore, in the future, due to policy restrictions in some regions, local mining may shift to areas with excess energy. For these areas, cryptocurrency mining can actually use excess energy to create greater benefits for them.

Market Analysis

BTC continued to fall during the day, and the trading volume increased significantly

According to the data from Huobi trading platform, BTC continued to fall during the day, with the lowest price reaching 38517.86 USDT. It rebounded slightly in the afternoon and is currently trading sideways at 40300, with a significantly larger trading volume. At the one-hour level, the short side made a rapid decline in the morning, breaking through the lower edge of the previous oscillation range, and then found support at 40300. It fell again at noon, with the support at 39200. At the daily level, BTC ushered in five consecutive negatives, with a large decline. In the evening, we will continue to pay attention to the continuation of the downward trend, the breakthrough of 41000 above, and the support of 39200 below.

According to the data from Huobi trading platform, ETH continued to fall during the day, with the lowest price reaching 2857.92 USDT. It is currently trading sideways at 2950, ​​with a significant increase in trading volume. From the one-hour level, the short side broke through the previous shock range in the morning, and may form a new round of sideways trading at 2950. From the daily level, ETH fell sharply today and returned to 1/3 of the previous rising channel. In the evening, we will continue to pay attention to the continuation of the downward trend, the breakthrough of 3000 above, and the support of 2860 below.

In terms of contracts, Huobi contract big data shows that BTC contract holdings have slightly decreased, contract trading volume has slightly increased, and the contract market is active. The basis of delivery contracts has slightly increased.

ETH contract open interest decreased slightly, contract trading volume increased slightly, and the contract market was active. The basis of delivery contracts increased slightly.

The price of USDT in Huobi Global OTC market is 6.51 yuan.

According to Huobi Research Center data monitoring, today's DeFi total locked volume (TVL) fell slightly to $100.81 billion, and the real locked volume fell slightly to $72.21 billion. Among them, Venus fell the most, reaching 26.45%. Today's total DeFi transaction volume rose slightly, reaching $10.80 billion. Among them, PancakeSwap rose the most, reaching 47.84%.