The hash rate drop is just over 2% with the new restrictive measures.
State Grid, the state energy company, calls for expanding the ban across the country.
The Chinese provinces of Henan, Gansu and Anhui have decided to ban the mining of bitcoin and other cryptocurrencies on their territory, in order to reduce electricity consumption. In this way, they are added to the other five territories of this country that had previously restricted this activity. Other provinces are expected to do the same in the short term.
The news was confirmed by local media in Anhui, a region of eastern China with 60.3 million inhabitants. With respect to this territory, the portal Hefei Online it details that the province’s electricity demand could exceed supply in 2022, and that is why measures of this style are needed to prevent an energy crisis.
Also, a specialized journalist from that country known as Wu Blockchain confirmed the data to Crypto News and added Henan and Gansu to the payroll of provinces that ban mining. In addition, other jurisdictions of the remaining 14 in the country could follow the same course, inform.
According to data provided by the University of Cambridge’s bitcoin Electricity Consumption Index, as of April 2020, Gansu had 2% of the processing power of all of China. Meanwhile, Henan accumulated 0.08% of the hash rate and Anhui had 0.04%. This means that, despite being widely populated areas, their contribution to the country & apos; s total mining power barely exceeds 2 per cent.
China expels bitcoin miners gradually
The provinces that had already banned mining are Inner Mongolia, Xinjiang, Qinghai, Yunnan and Sichuan (though only in its most important city, Ya’an). Thus, what was once a country of excellence for this business thanks to its hydroelectric dams and the capacity of its power distribution network, today has become a place from which miners migrate little by little.
As the Criptopedia de CriptoNoticias explains, cryptocurrency mining is about solving mathematical problems to validate transactions on the blockchain and allow the issuance of new cryptocurrencies. For this, specific equipment, processors and graphics cards are used that demand considerable energy consumption.
It is precisely for this reason that many States limit this activity on their territory, especially in those where this type of energy is scarce. Others, on the other hand, argue an alleged environmental impact of mining to limit it, although some analysts argue that it is not a harmful activity in this sense.
State Grid, the energy provider that calls for a ban on mining
One of the main drivers of the ban on bitcoin mining in China is State Grid, the state-owned electric power distribution company. The reason is the shortage of electricity in some provinces of the countrylike, for example, Anhui.
In this way, according to the journalist Wu Blockchain, State Grid would have requested the national government to restrict the activity throughout the country. Crypto News contacted Wu, who claimed this was an official communication addressed to authorities, although it was not openly published.