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China bans hydropower stations from providing power crypto mining firms

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China’s onslaught on the Bitcoin and crypto industry is far from over. In a fresh blow to whatever’s left of the mining industry in China, the country’s authorities have now resorted to prohibit the hydropower stations from providing power to crypto mining companies.

According to the latest report, China’s People’s Government Office of Yingjiang County, Yunnan Province has released a notice calling to ban all illegal hydropower stations from supplying Bitcoin and cryptocurrency mining companies. It urged municipalities across different provinces to notify all hydropower stations in their jurisdiction to stop them from supplying electricity for crypto mining firms and also directed the removal of any mining equipment or rigs, if any, before Wednesday, 25th of August from the power plant areas.

The circular also mentioned that the regulatory entities intend to establish workshops and related departments to force the dismantling of the crypto mining rigs. There is no room for negotiations and if the hydropower stations do not comply with the warning, they will be dismantled by the State Energy Bureau.

The official report further mentioned,

“The Yunnan Provincial Energy Bureau previously stated that it will seriously investigate and punish the illegal activities of Bitcoin mining companies relying on power generation companies, unauthorized access to electricity, evasion of national transmission and distribution fees, funds, and additional profit-making.”

China’s relationship with crypto industry

China has always been wary of the cryptocurrency industry despite being pro-blockchain. Earlier this year, the regulatory authorities in the country outlawed the mining of Bitcoin and cryptocurrencies. This was enough to trigger not just a slew of corrections in the market but also caused a wave of migration by miners from China to central Asia and North America.

Since then, Bitcoin has seen a notable recovery. For instance, it broke a crucial high to hit $50K on the 23rd of August. TWJ had earlier reported about the network’s steady hash rate and difficulty recovery.

Bitcoin miners are still hodling; mining revenue jumps by 57%

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Bitcoin network has seen an increase in terms of the hash rate securing its robust network. Owing to the recovery, its mining revenue has jumped by 57%, reaching levels last seen in mid-2020. This comes after this year’s sweeping clampdown in China that has greatly swelled profits for miners outside of the world’s second-largest economy.

The figures for Bitcoin mining revenues saw a sharp rise in the last few months as the network’s mining rate reached a massive 112.5 EH/s this month, compared to the low of 90 EH/s in July. As a matter of fact, the mining revenue of BTC is up 10%, or $4.3 million, from the previous week alone. To top that, the transaction fees generated are up 22%, or $118,000 per day.

According to the prominent blockchain intelligence platform Glassnode,

“Bitcoin miner revenue per hash has climbed by 57%, returning to mid-2020 levels as the Great Migration continues. The typical 900 $BTC mined per day are distributed between ~62.5% of the peak hash-power seen in May.”

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Uptick in Bitcoin hash rate and difficulty

The great China migration had massive effects on the Bitcoin network’s health. The hash rate fell by about 50%, depicting how much the network relied on Chinese mining. However, on the 16th of August, the figures for hash rate rose to 136.2 exa hash/sec. The mining difficulty was also adjusted to 15.56 TH for the first time since the second week of June this year.

Popular analyst Will Clemente noted,

“Miner revenue (in BTC terms) per hash soared after the great China mining migration. Less competition = higher profitability for the miners still operating. As hash slowly begins to come back online, the impulse in BTC/hash is slowly fizzling.”

Clemente noted yet another interesting trend that despite Bitcoin revisiting $48k, miners weren’t eager to cash out their accumulated Bitcoin. In fact, he went on to add that it is because of the high revenue and hash that the miners have been accumulating putting into perspective that they believe the crypto-asset will soar higher.

Bitcoin [BTC] hash rate recovers after Chinese exodus

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The hash rate securing the world’s largest crypto-asset, Bitcoin [BTC], saw a significant recovery as it climbed to levels last seen in mid-June this year. As of 15th August, the figures for network hash rate stood at 133.5 exa hash/sec. Over the past 24-hours alone, it was up by almost 11%. Since the 2021 low of just 68 exa hashes per sec [EH/s], the hash rate has grown by over 95%, according to the data compiled by BitInfoCharts.

The hash rate fell drastically after cryptocurrency mining restrictions intensified in China, forcing domestic Bitcoin miners to shift their bases to crypto-friendly nations such as Canada, Kazakhstan, and the United States. The abrupt departure of miners from the grid resulted in the network hash rates slashing more than 60% from an all-time high of 180 exa hashes per second [EH/s] in less than two months.

Since then, several miners have resumed their activities, which was evidenced by the latest uptrend in hash rate after two months of laying low.

hashrate

Bitcoin Difficulty Adjustment

Accompanying the Bitcoin has hash rate, the mining difficulty witnessed a considerable spike as well after an adjustment to 15.56 TH for the first time since the second week of June this year.

While the latest surge in difficulty is on the larger side, it isn’t really surprising. However, it is significant since it marks the first visible rise since the Chinese mining ban came into force. A 13.77% increase In the Bitcoin mining difficulty in two consecutive jumps, demonstrates a crucial trend that is currently underway – Chinese BTC miners are finding new bases elsewhere. The subsequent hash rate recovery further validated this thesis.

BTC Difficulty

Besides that, according to several reports, the machines that were brought back online were the same ones that had been plugged in across China. Several miners in the country resorted to selling their equipment rather than moving their bases from China due to a variety of reasons from language barriers to capital constraints.

Bitcoin Miner Genesis Digital Assets Raises $125M

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Bitcoin mining operator Genesis Digital Assets has raised $125 million in equity funding to drive its aggressive expansion plans. According to the official press release, the funding round was led by Kingsway Capital, a UK-based private equity fund with over $2 billion in assets under management [AUM] that focuses on frontier emerging markets. As part of the funding round, Kingsway’s CEO Manuel Stotz has joined the Genesis Digital Assets board of directors.

Stotz spoke about the importance of Bitcoin in terms of financial inclusion of the global poor and unbanked and said that BTC mining provides security to make this possible. He also revealed that the team behind the mining operator has been building highly profitable large-scale mining farms for approximately eight years while the industry as a whole has only been around for twelve. The exec also added,

“There’s no one else in the bitcoin mining industry that has this level of experience and we’re incredibly excited to support their next wave of growth and long-term vision.”

Bitcoin Mining Firm’s Aggressive Expansion Plans

Genesis Digital Assets plans to pour in the freshly acquired capital of $125 million to buy equipment and develop new data centers across the United States and the Nordic region. As of July 2021, the firm’s data center capacity is at more than 150MW. This represents a total hash rate of over 2.6 Exahashes (EH/s); which accounts for almost 3% of the global Bitcoin mining hash rate. Within a year, the BTC mining firm anticipates an additional 5.5 EH/s to be online. Besides, the GDA also expects to reach a capacity of over 1 gigawatt by the end of 2023.

Following the development, Abdumalik Mirakhmedov, Executive Chairman and co-founder of Genesis Digital Assets, reportedly stated,

“Our mission is to provide the infrastructure that will power the open-source monetary system revolution and we’re excited to have Kingsway Capital and Manuel onboard as we continue to scale our mining operations.”

Iran confiscates 7,000 Bitcoin miners operating illegally

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Iranian authorities have reportedly confiscated 7,000 Bitcoin [BTC] mining machines that were functioning illegally in the country. According to the state media, this happened to be Iran’s largest seizure of cryptocurrency mining machines to date. The machines were found in a deserted factory west of the capital Tehran.

This comes in the backdrop of Bitcoin’s hash rate taking a massive hit, an event that was spurred by a 90% shut down in China’s cryptocurrency mining space, after years of extravagant mining.

Iran’s Cryptocurrency Mining Environment

Iran considers cryptocurrency mining as an authorized activity provided the miners acquire a license from the country’s Ministry of Industry, Mine, and Trade. The country provides cheap power but the miners are required to sell their Bitcoins to the central bank. Tehran also enables cryptocurrencies mined in the country to be used to compensate for imports of authorized goods. These moves by lawmakers have managed to attract miners of late.

Even with these provisions, the authorities claim that many miners flout the rules and keep operating in the country without obtaining a proper license.

Interestingly, the latest news comes a month after the western Asian country had announced banning all cryptocurrency mining rigs, including the legal ones, until the end of the sixth Iranian calendar month on the 22nd of September amidst widespread power outages across the country.

During this time, President Rouhana had also claimed that 85% of crypto mining in the country was operating illegally and unlicensed. Since then, the authorities have been on the lookout.

Besides, a recent study by blockchain analytics company, Elliptic revealed that nearly 4.5% of all BTC mining takes place in Iran and the country is using cryptocurrency to dodge sanctions imposed by other countries. In addition to that, Elliptic also disclosed that crypto mining needed the equivalent of around 10 million barrels of crude oil a year, or 4% of total Iranian oil exports in 2020.

Bitcoin infrastructure nothing short of “modern marvel” despite hash rate plunge

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Bitcoin’s network hash rate has dropped this week. Over the past 24-hours, the cryptocurrency has lost over 40% of its hash rate and was down to figures last seen in November 2020, according to the latest chart by Blockchain.com. the seven-day average of Bitcoin’s total network hashing power slid close to 127 EH/s on Friday. Since then, it has noted a minor recovery and was currently found to be at 130.28 EH/s.

Hash rate is essentially the total amount of computational power used to mine and process transactions on the BTC blockchain. Hence, the greater the hashing power in the network, means more resources are devoted to processing transactions, hence, more security and resistance to attack by malicious entities.

Bitcoin hash rate:

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In recent times, however, the hash rate dropped amidst several reports about crackdowns in China linked to BTC mining operations across various provinces due to tighter regulatory scrutiny. Several prominent Chinese bitcoin mining pools are facing further drawdown in terms of hash rate after Sichuan ordered a state-owned power grid to slash the energy supply for 26 local mining farms initially. Currently, almost 15 large BTC mining pools by real-time computing power are witnessing a considerable plunge in hash rate drop.

In addition, China-based, 1THash, which happens to be one of the world’s largest mining pools, shed almost 70% of its hash rate last week.

Community reactions to hash rate drop

Several notable figures in the space speculated that there will not be any long-term consequences since. They are of the opinion that the Bitcoin hash rate will eventually flip after the network miners shifts their base from China to other regions

Hashkey Group’s Molly tweeted,

“We gonna witness a history in bitcoin mining tonight, all mining farms (about 8m kw electricity load) will shutdown at 12pm Beijing time tonight, Harare rate already dropped significantly after sichuan gov announce shut down bitcoins mining farms in Sichuan.”

Despite the low figures, many of the proponents were not worried about the network at all. Castle Island Ventures Partner, Nic Carter, for one, called the infrastructure a “modern marvel” and tweeted,

“Bitcoin’s hashrate transition, in which >50% of its industrial base (representing $15-20b in ann. revenue) leaves China and becomes globally dispersed, while Bitcoin continues to maintain 100% uptime, is nothing short of a modern marvel. Name another industry that could carry out an infrastructural transition that seamlessly within a year. It’s astonishing”

Is China slowly dismantling the presence of crypto in the region?

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The crypto-verse has been receiving a lot of heat from China. Just as the country made advancements towards the launch of its central bank digital currency [CBDC], the digital yuan, the region sidelined the crypto market. The Chinese government seemed to be taking this forward as it shut down several mining farms around the country.

Right after Elon Musk withdrew support for Bitcoin, China called out several crypto miners in the country and urged them to exist. While the crypto community went on to label the saga, “the great mining migration,” several mining farms in the region were already making arrangements outside China. Prolonging this, the government recently shut down mining farms in Sichuan.

As per a recent report by Sina Finance, it was noted that the authorities of Ya’an City, in Sichuan had asked 26 mining platforms to shut shop as part of an investigation.

A Chinese crypto blogger, Colin Wu went on to reveal that the authorities had ordered power generating firms around the region to terminate any form of power supply to cryptocurrency mining farms. Elaborating on the government’s latest move, Wu stated,

“There are many small and medium-sized hydropower stations in Yunnan, Sichuan, and it may be difficult for them to receive government supervision. However, large-scale projects will be shut down in the short term.”

China’s largest cloud service provider follows suit

While China has been going ballistic on crypto mining platforms, the country’s largest cloud service provider, Alibaba Cloud jumped on the bandwagon. The platform had reportedly alerted mining farms as well as crypto firms across the country that it would soon stop working with them citing regulations imposed by the Chinese government.

Wu tweeted about the same and noted,

Furthermore, Wu noted that this move of Alibaba Cloud would be hefty for cryptocurrency mining companies. However, exchanges wouldn’t have a lot of trouble. The tweet read,

“This has little impact on the exchanges, because their servers and registered locations are outside of China, but mining companies may need to do some replacements.”

Bitcoin jumps after Elon Musk talks about reinstating BTC payments at Tesla

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Thanks to Elon Musk, Bitcoin once again neared $40K.

This was right after the CEO of Tesla Inc. tweeted that the company would resume transactions with Bitcoin when mining is done with more clean energy. Bitcoin was up by more than 12% over the past day which drove its price all the way to $39,293, at the time of writing, the highest level since the 3rd of June. The latest comment comes after the exec announced halting BTC payments at Tesla citing environmental concerns just a few months after entering the space.

His tweet regarding the same, read,

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.”

Musk’s latest argument was in response to the reports of Magda Wierzycka, the CEO of financial services company Sygnia questioning the nature of his tweets and their relation to the price action of Bitcoin and Dogecoin. In a conversation with Bruce Whitfield at the Money Show last week, Wierzycka, who happens to be one of the richest women in South Africa, took a jibe at the ‘Technoking’ when she said,

“The volatility we have seen is an unexpected function of what I would call market manipulation by Elon Musk. If that happens to a listed company, he would be investigated and severely sanctioned by SEC.”

While brushing off Wierzycka’s criticism as “inaccurate,” Musk reiterated his previous defense and went on to add that Tesla had sold nearly 10% of holdings to demonstrate that the cryptocurrency could be liquidated easily without moving the market.

Bitcoin Mining Conundrum

The debate over the environmental effect of mining BTC has intensified over the past year. In a bid to bring in sustainable methods for the same, the Square, the financial services and mobile payments company founded by Twitter CEO Jack Dorsey, had earlier announced collaborating with blockchain technology provider Blockstream Mining to build an open-source, solar-powered bitcoin mining facility. According to reports, it also planned to infuse $5 million in the renewable mining facility, with Blockstream.

Malaysian authorities nab four illegal crypto miners with 441 BTC mining machines

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Malaysian police have managed to take down a massive illegal mining rig that involved over 441 Bitcoin mining gears.

The crypto industry’s mining process has garnered a lot of attention over the years due to the rewards that come with it. The value of BTC has witnessed drastic growth particularly over the last couple of months and has even managed to amass the attention of the globe. With this, mining rewards have also observed an increase further enticing more individuals into it. This, however, comes with a lot of setbacks. While many have expressed concerns over the environmental damages caused by the whole mining process, governments across the globe have been worried about electricity thefts.

Malaysian illegal mining crackdown

The entire Bitcoin mining process consumes a lot of electricity making it difficult for just anyone to execute it. In the Malaysian state of Penang, authorities busted a crypto mining rig. The Malaysian police managed to seize a total of 441 machines that were used for mining cryptocurrencies. While these machines were worth a whopping RM180,000.

The police had reportedly carried out a total of four raids and managed to nab four suspects associated with the case. The George Town OCPD Asst Comm Soffian Santong elaborated on the same and stated,

“During the raids at Lintang Hajjah Rehmah, Jelutong, Sungai Dua, and Bayan Lepas, police also confiscated four computers, 11 routers, four modems, and 10 fans.”

The aforementioned suspects have been booked under the Section 379 and Section 427 of the Penal Code along with the Section 37 of the Electricity Supply Act 1990.

Furthermore, the police found that all the premises that were raided were stealing electricity to conduct Bitcoin mining activities. The Tenaga Nasional Berhad [TNB] had even endured losses up to  RM420,000.

While the person behind the entire plan is still on the run, the Malaysian police have been intensively searching for the person running this rig for the last couple of months.

Solar-powered Bitcoin Mining by Blockstream to see investment from Square of $5M

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Bitcoin mining might be facing severe cases of crackdowns in some parts of the world, the innovation to make the process have a less adverse effect on the environment continues.

In pursuit of bringing in sustainable methods for the same, the Jack Dorsey-led financial services company Square is all set to team up with blockchain technology provider Blockstream Mining to build an open-source, solar-powered bitcoin mining facility.

This facility will be situated at an existing Blockstream location. in the United States.

According to the official press release, Square plans to inject $5 million in the facility, with Blockstream that is focused on providing infrastructure and expertise to develop and manage the project for Bitcoin mining. This facility in question will be a “proof-of-concept for a 100% renewable energy Bitcoin mine at scale.”

Blockstream stated,

“We hope to show that a renewable mining facility in the real world is not only possible but also prove empirically that Bitcoin accelerates the world toward a sustainable future.”

The partnership, as confirmed by Square, is essentially a part of its Bitcoin Clean Energy Investment Initiative that was launched in December 2021 to promote companies engaged in reducing carbon footprint by the cryptocurrency ecosystem. Through this initiative, the two platforms will also roll out a “public-facing dashboard” which will act as a transparent case study for renewable energy as well as mining of the crypto.

Can Bitcoin really go green?

The debate surrounding the cryptocurrency’s reliance on non-renewable energy isn’t new. However, of late the discussions related to the environmental impact of mining for the world’s largest cryptocurrency have come under immense scrutiny, thanks to Elon Musk.

There’s no denying that it does consume a lot of energy. This is a common concern among the BTC institutions and retail traders alike.

Several developers and academicians have given their fresh dose of perspective on the controversial subject as the Bitcoin mining debate has gained traction once again. Some are of the opinion that looking for other ways and putting a stop to the increasing use of real physical resources for mining is going on a wild goose chase. However, there are those, who are trying to make Bitcoin green.

Recently, Norway’s second-richest person, and oilfield services billionaire Kjell Inge Røk­ke, had launched a new venture called Seetee. The maon objective of the company’s goal is to set up BTC min­ing op­er­a­tions that “trans­fer strand­ed or in­ter­mit­tent elec­tric­i­ty with­out sta­ble de­mand lo­cal­ly—wind, so­lar, hy­dro pow­er— to eco­nom­ic as­sets that can be used any­where.”

In short, it intends to locate Bitcoin mining centers in those places where renewable energy farms essentially produce electricity in surplus especially when there is low demand.