Recent reports have suggested that China’s crackdown on the crypto will extend to mining, as Sichuan Electric Power Corporation, distributed by the state, has officially distributed a circular power plant command to stop power supply at low cost for mining operations. As the CCN reported, the report was revealed because the company admitted it made several mistakes, including by using unconfirmed claims on the circular.
Later, the Caixin state news publication showed that the government has not planned to ban the extraction of bitcoin mines or any activity involving cryptocurrency mining yet. However, a recent report by the South China Morning Post (SCMM) shows that miners in this country are considering transferring operations abroad to make sure they can stay in business.
China’s resolution on economic encryption began earlier this year, as regulatory authorities made it illegal to carry out and participate in initial currency bids (ICO), and then close its doors to encrypting money. This has now led the Chinese miners to take precautions.
China has become the undisputed leader in bitcoin mining. As it became more competitive, few ordinary users managed to make a profit, and hash power was gathered in large centralized farms in regions that provide operators with competitive advantages such as cheap labour and low electricity. Currently, the country hosts various mining operations, but this may soon change.
Bitcoin Mining is still a Profitable Business
The South China Morning Post has revealed that it has approached three other mining organizations, but has refused to interview them, citing fears about uncertainty and regulatory control in the deals they have struck with local energy companies. The publication added that bribery is common in industry and that heat can “hide” production before transferring it to the national grid.
Commenting on business practices, Others have said that no other miners boast about it, because “it is better to make a fortune in silence.” In China, the thermal power can be as low as 0.27 yuan ($ 0.04) per kilowatt hour hydroelectric power can be 0.15 to 0.25 yuan ($ 0.02 to $ 0.04 ) per kilowatt hour depending on various factors.
A Beijing resident further revealed that he started exploiting bitcoin in 2013 with an initial investment of 5 to 6 million yuan (about $ 800,000) and that he has expanded his operations over the years 100,000 mining machines, and customers.
Cryptocurrency mining refused to disclose its profit margin but pointed out that it could earn about 100 yuan ($ 15) a day from each machine, provided it has a safe source of electricity to allow it to avoid the losses of having devices without power.
However, it is in favour of the movements that have led to the closure of exchanges, as they are centralized institutions that oppose the nature of cryptocurrencies and that traders are increasingly dependent on them as they have switched between themselves. Moreover, Cui is worried about China’s influence on jewellery.
“It is essential that bitcoin reduce its dependence on China, so it becomes stronger, as has already been shown in its latest price increase.”