Because of the storm season and heavy rains, and the country suffering “the severest flood since 1998,” followed with landslides, according to Forbes Senior Contributor Kenneth Rapoza, several dams are experiencing significant stress – and these are at the higher elevation than the world’s largest hydroelectric power station, the Three Gorges Dam, meaning more water for the titan.
“If the Three Gorges Dam did break, it would certainly be a horrible event, but it’s improbable,” Daniel Frumkin, researcher and tech writer Braiins, the company behind Slush Pool and the Stratum V2 protocol for pooled mining, told Cryptonews.com. He argued that many members of the Communist Party of China (CPC) have degrees in hydro-engineering and that “the discipline dates back many hundreds of years.”
Moreover, as much water as possible is being unloaded from the conduits, which is creating flooding downstream on the one hand, while striving to anticipate a disaster if the dam were to break on the other.
Nevertheless, in the state of other dams, the CPC is detonating the dams to release the water, said the researcher. Rapoza also mentioned reports that intact dams were “blasted down” to free the massive inrush of water.
“For China to lose face internationally with the collapse of the world’s largest dam would be devastating, so they’ll likely do anything possible to ensure that doesn’t happen. The most likely scenario is that the flooding continues for the next month or more of the rainy season, but the dam ultimately holds,” Frumkin said.
Also, the dam’s strain is foreseen to ease if the most torrential rains end this week.
Miners seems not to be affected yet
While Bitcoin mining in China has been “somewhat” affected by what many called the most damaging flooding in decades, some crypto analyst, in general, assumes that notable Bitcoin miners have not been really affected.
“They have a comprehensive understanding of the risks during the rainy season, including potential flooding, mudslide, etc.,” said Xu.
“Although they might have limited ways to hedge those risks (e.g., insurance), they can well capitalize their local networks which can directly help them to mitigate these risks in a way that have limited impact on their Bitcoin mining operations.”
The flood and the likely catastrophic failure of the Three Gorges Dam have been a constant topic in mining organizations for several months, said Frumkin. Nic Carter, Partner at Castle Island Ventures and Co-founder of crypto market analysis firm Coin Metrics, emphasized that the conversation on the issue needs to be more comprehensive – “proportionate to the threat.”
Frumkin continued that there’s still very little knowledge about what is actually occurring or how many miners in China have been affected precisely.
“The best we can do is keep an eye on block times and speculate that Bitcoin mining isn’t being impacted significantly as long as hash rate remains above c. 110 EH/s with current BTC price,” he said.
Xu added that some Bitcoin mining farms “are located in “secret” places in China,” and it’s challenging to locate them without “an introduction.”
And speaking of hash rate, Frumkin also recommended that these events and conversations had “little effect” on the mining business if we take into the statement that the flooding and concerns about Three Gorges Dam started back in early June – and total network hash rate was growing everywhere most of June and July before collapsing in the past week.
“An important point is that most Chinese mining operations are located west of Chengdu in Sichuan, which is far upstream of Three Gorges Dam. There are plenty of other dams in that region which supply the power for miners in Sichuan, but perhaps the flooding is less severe there or the mining farms are purposely set up on high ground,” mentioned Frumkin.
This month, HASHR8 interpreted the consequence of the floods on mining, given that some 65% of the Bitcoin hash rate is expected to be in China. They wrote that the situations for BTC miners are “less lucrative than the previous [mining] difficulty epoch,” but that the hash rate and mining challenges have been going up.
“One reason behind the increasing hash rate may be Chinese miners securing latest-[generation] [mining] rigs,” they said. “These powerful rigs turning online for the first time is likely enough to outweigh the less lucrative conditions and facilities being destroyed.”
Mining facilities are commonly in the firing line, with many setting up close to hydropower plants throughout the rainy season.
HASHR8 expects more loss to occur in the following months, while Xu too anticipates some adverse impact. The senior analyst said:
“I do expect some miners will get impacted negatively due to the flooding. However, the experienced ones may only be impacted very little or even not at all. The competitive landscape for Bitcoin mining is in the process of becoming the survival of the fittest.”
At the time of writing (16:29 UTC), BTC trades at USD 9,357 and continues in a day. The price is up by 1% in a week, trimming monthly losses to 2