Is it really that exaggerated that a few heavy rains in Sichuan would affect the global Bitcoin market?

Image source: Visual China

Author Jin Meier

Nuwa must have forgotten Sichuan when she repaired the sky!

Recently, the Sichuan Basin has been experiencing continuous rains, which has caused great suffering, especially in the western part of the basin, where floods have occurred frequently.

However, the impact of this rainstorm exceeded expectations - as the center of the world's Bitcoin mining field, the Sichuan mountainous area has touched the extremely sensitive nerves of global investors!

Heavy rains cause damage to mines

Everyone is familiar with Bitcoin, ICO, etc., especially last year when Bitcoin hit new highs. Bitcoin mining and mining farms have become popular terms, and even the aunties who dance in the square can talk about them.

When it comes to mining, we have to mention Sichuan.

Data shows that 70% of the world's cryptocurrency mining machines are in China, and Sichuan mining machines account for 70% of the country's total. It can be said that Sichuan is the center of the world's mining fields.

The heavy rain in Sichuan has become the focus of global Bitcoin investors. According to media reports: The flood has affected the efficiency of digital currency mining.

According to photos circulating on social media, a large number of mining graphics cards, power supplies and other parts were thrown outdoors. Some miners who were hoping for the best were still trying to clean and repair the graphics cards in an effort to recover their losses.

According to Golden Finance, there is no specific data on the losses of Sichuan mines. At least tens of thousands of mining machines should have been submerged by the flood. Judging from the photos, these mining machines have obviously been scrapped and are almost impossible to repair.

By checking the computing power of the entire Bitcoin network, it can be found that the computing power of the entire network has declined significantly since June 24. On June 27, the computing power of the entire network reached its lowest value in nearly 20 days, which coincides with the time of the flood disaster.

Therefore, many industry insiders believe that the reason for the decline in computing power of the entire network is likely related to the flood disaster.

Morgan Stanley analysts predict that floods could reduce global Bitcoin mining efficiency by as much as 8%-10%.

From the price point of view, the price of Bitcoin has risen in the short term recently, breaking through the $6,700 mark at one point.

According to foreign media Cointelegraph, on July 5, Wall Street analyst Tom Lee said in an interview that the price of Bitcoin is likely to exceed US$25,000 (approximately RMB 160,000) by the end of this year.

The editor checked the BitFan website and found that the current price of Bitcoin is around US$6,596.

Some industry insiders said that the floods had limited impact on the price of Bitcoin.

Mine owner: The impact is not as big as imagined

How is the situation of Bitcoin mining areas in Sichuan during this rainstorm? Are the losses heavy?

After many twists and turns, the reporter from Financial Investment News contacted Tatuo Mining.

According to the person in charge, Mr. Zhou (sound), there are definitely losses, but they are not as serious as the outside world imagines.

"There are several mining sites in Sichuan. In this flood, only one site suffered serious damage, while the others were fine."

Mr. Zhou further revealed: "The losses this time are mostly small mines. Large mines are often next to hydropower stations and have taken flood prevention measures, so they were not affected this time. However, many small mines are some distance away from the dam, and most are near the river. They were built casually using tiled houses in surrounding rural areas, so they suffered this time."

Another mine owner said that as far as he knew, some small mines suffered serious losses: "Now there are a large number of mining machines in the mines that are managed by trustees. Many customers are consulting overnight. Not to mention their own losses, the most annoying thing is the customer compensation, because it is not just compensation for the mining machines, but also compensation for the loss of opportunities. For our industry, time really is money!"

So, how can the small mines that have suffered heavy losses overcome this difficulty?

The above-mentioned miner said: "Small mines have their own ways, but in any case, only a few will quit. Now everyone is still optimistic about the price of Bitcoin. Some small miners should seek to buy shares to tide over the difficulties. After all, wealth and honor are sought in danger!"

Mr. Zhou said that floods have turned into opportunities for large mines.

"Many customers are eager to start mining, so they simply buy new mining machines and entrust them to us while arguing with small mines. In addition, the current price of mining machines is relatively cheap."

He gave an example, saying that the price of Ant S9 mining machine was about 38,000 yuan last year, and now it is about 4,000 to 5,000 yuan.

"It's a good deal to come in at this time. We still have 1,200 seats available."

The editor of Financial Investment News learned in an interview that in the eyes of mine owners, floods are just a small case, and they are more worried about policy risks.

Mr. Zhang from Wuhan Renren Mine told me: “Some places have issued documents to rectify the situation. No one is allowed to enter. Not only have the preferential electricity prices and land been cancelled, but also some small mines that do not comply with the regulations have been confiscated.”

At the same time, as China banned Bitcoin and tightened regulations, some miners began to consider overseas mining.

"As far as I know, many mining owners are crowdfunding to expand overseas," Mr. Zhang told the editor: "With sufficient funds, everyone can make money and the risks can be shared."

Mr. Zhou said: "Overseas risks are also great. Last year, some people in our circle went to Vietnam and Laos to build their own mines, but then the situation changed and the mining machines were confiscated. Now it's very painful. Canada's electricity prices were okay before, but I heard that the price has increased this year. At present, the range of optional areas for building mines overseas is getting narrower and narrower."

The editor of Financial Investment News learned that a mine owner named Zhao (sound) is crowdfunding to build a mine in Bhutan, and the total investment is initially set at 20 million.