Local farms in Sichuan have been forced to restrict their activities

Financial Administration Authority of Sichuan Province, China a asked that “mining entities carry out their mining activities in an orderly manner”. Mining farms in the region account for about 9.66% of the hash rate of the Bitcoin network.

The mountainous region of Sichuan offers cheap electricity and a cold climate, very attractive to Bitcoin miners and other cryptocurrencies. Numerous subsidiaries of mining giants Bitmain and AntPool are located in the province, along with others.

Local farms in Sichuan forced to close

A public notice published on May 18 indicates that electricity use in the region increased by 22% in May. Meanwhile, water flow in local rivers has decreased by 20%, leading to a shortage of hydroelectric supply.

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Local farms in Sichuan have been forced to restrict their operations due to power outages.

This is very likely to be the main reason for the request of the authorities to close the cryptocurrency mining activities. In any case, this will deal a severe blow to the hash rate of the Bitcoin network, which has been affected by halving anyway. Mining with older equipment is no longer profitable, especially given that the price of Bitcoin has fallen below $ 9,000.

Currently, Chinese farms account for about 70% of the hash rate of the Bitcoin network, according to projections published by the PANews news site. However, the number and capacity of mining farms located in Europe and America has increased significantly in recent years. The Chinese authorities have not been very open to mining, but other parts of the world have a positive attitude. However, China remains the country with the lowest electricity prices in the world.