China has a tough stance on cryptocurrencies and recently banned cryptocurrency mining and trading. The official authorities of the country have started a search party to find and shut down any cryptocurrency mining firms. The authorities are also shuttding down operations which have spread as far as the southwest province of Sichuan.
On Friday, the National Development and Reform Commission (NDRC) ordered a branch in Sichuan and the Sichuan Energy Bureau. It ordered them to shut down all cryptocurrency mining centers and projects. The order was to close down about twenty-six operations that were suspected to facilitate cryptocurrency mining by Sunday in the Sichuan province.
The electrical companies in Sichuan were ordered by the relevant authorities to perform inspections. This was to make corrections to the firms that have been participating in cryptocurrency mining. Moreover, the electrical companies were also ordered to stop the electrical supply to the companies that are suspected to facilitate cryptocurrency mining.
The local governments of Sichuan were also ordered to cooperate and search for any crypto-mining projects that may carry on secretly and forcefully shut them down.
Hydropower is the main energy source that is used by miners for verifying bitcoin transactions in Sichuan. Sichuan is the second-largest bitcoin mining province in China. The miners can take advantage of the province’s rich hydropower resources to generate cryptocurrencies for a profit.
Bitcoin mining uses huge chunks of power and is mined by solving complex mathematical puzzles through high-energy consuming computers.
This shutdown operation demonstrates China’s displeasure with cryptocurrencies and crypto-mining. Other mining centers in China have also been ordered crackdowns on bitcoin mining. These include but are not limited to Yunnan, Mongolia, and Xinjiang.
The inner Mongolian territories of China have proposed that companies and individuals who indulge in cryptocurrency mining should be punished to show the country’s stance on the operation.
The Chinese energy regulating agencies have been frequently meeting up with the local power companies. They are doing this to find and collect information on possible mining farms that could be operating in disguise.
About 75% of the bitcoin hash rate comes from China which makes it the world’s most pre-eminent crypto mining country.