- Chinese authorities disabled power on crypto mining farms in the Sichuan province starting last weekend.
- The southwest region of Sichuan was the fifth province in the middle kingdom to declare a restraint on Bitcoin mining.
- The mining difficulty of Bitcoin is waiting for a historic dip of beyond 11%.
Bitcoin mining is starting to lose its traction as Chinese authorities continue its crackdown operation on digital currencies; Sichuan declared that energy companies stop supplying power to 26 Bitcoin mining stations in the region.
Mining Operation Shutdown In The Middle Kingdom
After a conference between China’s Science and Technology Bureau and the Sichuan Ya’an Energy Bureau; Chinese authorities informed Bitcoin miners in the region that they must halt activities by June 25.
A region in the southwest of China, Sichuan, has been well-known between Bitcoin mining farms. This is because of the plenty of cheap hydroelectricity created during the rainy season; which lasts for up to five months throughout the summer.
Power corporations in the province informed crypto miners that they would be shut down until further notice. Energy firms were obligated to stop the power supply by the start of June 20.
Since China commenced strengthening its stand on cryptocurrencies, Bitcoin’s price has declined, hurting from its worst collapse.
The southwest region became the fifth province in the country with a crackdown on crypto mining farms. In May, China’s State Council declared crypto mining on its list of financial risks that compulsory for monitoring. This is regardless of having banned digital assets since 2017.
Shortly following the announcement, provinces including Inner Mongolia, Xinjiang, Qinghai, and Yunnan also discouraged and banned Bitcoin mining.
While the rainy season draws miners to the Sichuan province, miners migrate to Xinjiang for the rest of the year, where they rely on coal-powered energy sources when the weather cools down.
China Plays the Big Part
According to the Cambridge Center for Alternative Finance, China accounts for over 65% of the Bitcoin network’s hashrate. However, following Sichuan’s new development in halting mining operations, mining power backing Bitcoin fell almost 17%.
In contrast, the power outage in Xinjiang that occurred in April led to a Bitcoin hash rate decline of 30%, provoking a $10,000 drop in BTC price.
According to BTC.com data, Bitcoin mining difficulty is anticipated to record an 11.18% drop. Bitcoin mining difficulty, which measures how hard it is for miners to create a new block on the blockchain, already witnessed two negative adjustments in the past month, as it dropped from 25.046 trillion to 19.932 trillion.
It is imperative to perceive that when the leading cryptocurrency logged three consecutive negative difficulty adjustments in a row, the market has seen a massive drop in digital asset prices. In December 2018, miners were even switching off their equipment, given the rapid fall in prices.
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