Is the mining industry opening up? Here are some recent insights into Bitcoin mining

The third Bitcoin halving passed quietly, without causing much impact in the industry or on the price of the currency. However, there are a series of news outside the industry that deserve our attention, all of which are related to Bitcoin mining.

Since February this year, the Sichuan Liangshan Hydropower Consumption Demonstration Zone has implemented five big data projects, all of which are Bitcoin mining projects.

In April, the Ya'an government department in Sichuan issued a document stating that it would build a hydropower consumption demonstration zone and build Ya'an into an influential blockchain industry cluster in the country.

In May, Ganzi Prefecture in Sichuan Province held a symposium on the development of the blockchain industry. Liu Chengming, secretary of the prefecture party committee, spoke in support of blockchain and said that a hydropower consumption park should be built in Ganzi Prefecture.

The so-called "hydropower consumption" refers to the hydropower allocated by the power company. Projects entering the hydropower consumption industry demonstration zone can be simply understood as more compliant. Therefore, the Bitcoin mine entering the hydropower consumption demonstration zone means that the project itself is compliant and no longer secretive as before.

Sichuan plays an important role in Bitcoin mining in my country and even in the world, because Sichuan is rich in hydropower and has a large surplus of electricity during the flood season, so it has very good innate conditions for mining.

On the other hand, many areas in Sichuan with abundant hydropower are also relatively underdeveloped economically. There are not many profitable industries in these areas, and Bitcoin mining is one of the few industries that can generate considerable income for local governments. Therefore, developing Bitcoin mining in these areas is a win-win for all parties.

In the above news, the governments of many places in Sichuan have publicly called for the construction of blockchain industry clusters. However, these places are relatively backward in terms of economy, education and other aspects. Therefore, it is obvious that the blockchain industry here is unlikely to be an industry engaged in R&D and projects, but only a mining industry with a simple model and clear profits.

In fact, since the Political Bureau of the Central Committee collectively studied blockchain last year, some regions have begun to relax restrictions on Bitcoin mining. Now the release of these news indicates further relaxation of policies.

In addition, if we take into account that the economies of various regions have been hit to varying degrees by the impact of the epidemic, and this year is the country's poverty alleviation year, it is natural to develop Bitcoin mining in these economically backward but hydropower-rich areas.

Therefore, the gradual liberalization of Bitcoin mining will be a major trend .

I have shared with you several times about Bitcoin mining in previous articles, and many readers have asked us whether it is still suitable to enter Bitcoin mining now. If we look at this topic again today, we can see that compared with the past, there are several obvious differences now:

The first is that policies are clearer. In the future, the industry will no longer have to worry about it, but can operate legally and in compliance with the government. This will be a big boon to existing and future practitioners .

The second is that due to the impact of the epidemic, many practitioners in traditional industries have gone bankrupt, which may force some funds to flow into Bitcoin mining, and competition in the mining industry will remain fierce in the future .

Third, from the perspective of return on investment, the investment in mining machines generally pays back in 1 to 2 years. This rate of return is not appreciated by many people in the cryptocurrency circle, but it is quite high for practitioners in traditional industries . Therefore, this industry still has great appeal to traditional industries.

For individual investors, the good thing about the current situation is that the policy risks of investing in mining will become smaller and smaller in the future, but the rate of return may still be limited as competition becomes more and more intense.

However, one thing is certain: in any investment field, the best time to enter is definitely not a bull market, but a bear market .