Bitcoin miners in Inner Mongolia can no longer enjoy subsidized electricity rates for their crypto-mining operations, according to chinese news outlet Weixin. The authorities insist that mining companies have not directly benefited the wider Mongolian regions and local government. And now a large number of Chinese miners operating within the border of Inner Mongolia, electricity charges may rise by 33 percent.
This action comes as a blow to Bitcoin miners as around 60 percent of the world’s mining operations are based in China. In addition to some large-scale companies, such as AntPool, which are known for the high-income revenues they generate each year, they are based in the region in question.
China’s colossal Bitcoin hash rate share to drop following the move by local authorities
China controls a vast 60% hash rate on all Bitcoin mining operations in the world but all that is about to change following increased electricity tariffs policy in the Mongolia region. For a long time, the northern part of China has enjoyed favourable conditions conducive for bitcoin mining such as cool climate, cheap labour and subsidized electricity rates.
Bigwig firms like AntPool along with other miners based in Mongolia are likely to be affected negatively, thus resulting in decreased profits generated from mining operations. According to reports, at least 21 mining farms will be affected directly. However, it is worth noting that not all firms have been affected by the authorities’ move.
China inner Mongolia authorities issued the ‘surprise’ notice on 24 Aug 2020. Colin Wu, a famous Chinese reporter who mostly focuses on mining and industry regulations reports, also confirmed the news on his official twitter page.
— Wu Blockchain (@WuBlockchain) August 25, 2020
Crypto mining enthusiasts fear that more regions will follow the policy of the Mongolian authorities
Bitcoin Miners in China are now worried that increased electricity rates directive in Mongolia will now be imposed on other different regions in the country. Xinjiang region is more precisely tipped to be next to offer the instructions after Mongolia.A lot of mining operations will also take a hit in terms of profits generated as the rest of the world now enjoys a more level playing field.