One of China’s main Bitcoin mining power sources has called for more blockchain firms to use hydropower for their operations. Ya’an issued a public guidance which shows that the government is looking to make the city a high-quality example for consumption of excessive hydropower.
Ya’an city’s guidance placed great emphasis on the need for blockchain companies to use electricity from power sources connected to the state grid.
According to a local report,
“On principle, blockchain companies should construct factories near power plants that have excessive power and are integrated with the State Grid,” the guidance says. “For blockchain companies that use electricity privately generated from power plants [without integration to the State Grid] should be rectified in due time.”
As of late, China’s central government has indicated a change of attitude towards Bitcoin mining. Its National Development and Reformation Commission initially planned to eliminate Bitcoin mining activities in a draft guideline in April last year. However, plans have been scrapped.
China has hydropower sources which provide cheap electricity for miners to carry out operations. While attractive, the recent price movements (caused partly by the incoming halving event) have led miners to reduce investments in expansion.
Rising electricity costs around the world have led many miners to drop out of the crypto arms race. Recent data shows that miners reduced their holdings of Bitcoins in order to protect themselves against the tide of adverse market conditions.
The rainy season in China is usually a time during which conditions are favourable for Bitcoin miners, with more excessive hydropower and lower costs of electricity. However, the stagnating price of Bitcoin means that many mining farms are finding it difficult to find enough customers to operate profitably.
Earlier in the year in January, the price of Bitcoin in China rose from $9,150 to $9,400 in less than five minutes. The sudden spike marked a 83-day high for the cryptocurrency in Asia.