News Flash: Sichuan Bitcoin Miners Going Dark
Get on the phones with those Alibaba vendors! Go Go Go!
There have been rumblings on Twitter for the past little while about mining in Sichuan province being banned.
Looks like they’re all getting turned off today.
The whole thread is pretty great, but here’s some videos of miners being turned off.
Another video of them crating up miners
Why?
I’m not a Chinese policy expert, my guess is that they’re shutting down bitcoin mining for two reasons: one economic control and the other is energy consumption goals.
Economic Control
I don’t think this is a huge part of why miners in Sichuan are turning off, see below for what I believe is a more accurate depiction of what’s happening politically there.
But I will say that bitcoin isn’t *well loved* by the government of China, and it won’t be protected when push comes to shove. Or, say, if miner’s energy usage comes into conflict with another, bigger and more important state-level goal, namely a reduction in carbon emissions.
Energy Consumption
Historically, there are two big sources of energy that Chinese miners use: coal in the Mongolian plains and hydro from dammed rivers. Most of the coal is in Sichaun; most of the hydro power is in Hubei.
It’s hard to get exact evidence for this, but I strongly believe the Chinese politburo takes global warming, or at least their emissions goals, seriously. Shutting the bitcoin miners is an easy win for them to meet their emissions goals.
Since this is Sichuan only, I kinda think the regulation conversation went a little something like this:
National Politburo: Sichuan! You are burning too much coal! Our emissions goals require you to burn less coal!
Sichuan Government Dudes: Yes National Politburo! We will cut our coal emissions!
Sichuan Government Dudes: Miners! You are now banned!
Miners: Oh no. Fine, ok. *Pack their miners up, head to ???*
What this means for you, Home Miner
If you already have bitcoin miners up and running…
Nice. Your machines are about to start earning you more bitcoin for every kw that you put into them. As the total hashrate drops, every hash produced by your machine has a better chance of finding the winning block.
In the short term, this means the rate of new bitcoin issuance is slowed down, and that it takes longer to get a transaction confirmed. Your earnings rate should stay relatively unchanged.
In the medium term, the difficulty will start dropping. Blocks production will speed up and the issuance will resume its normal schedule: 6.25 new bitcoin every 10 minutes. When this happens, all the remaining miners will start earning more bitcoin per kilowatt spent.
In the long term, I’d expect these miners to find their way back onto the network somehow. Rumors are they’re looking to move out of China, maybe Kazakhstan, which is nearby.
Or maybe, just maybe…
If you don’t have bitcoin miners up and running…
There has probably never been a better time to get on Alibaba and try to buy some bitcoin miners.
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