64 Illegal Mining Farms will Close in China
The administration of the Dehong Dai and Jingpo Autonomous Prefecture in the western part of Yunnan held a meeting on the closure of mining farms on its territory. Liquidation orders were issued to 57 big data projects that mine bitcoin and are not licensed by the authorities. Also, 7 sites that are currently under construction are subject to elimination.
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Chinese Authorities Against Illegal Mining Farms
At first, Yunnan authorities considered the development of mining as a way to revitalize business activity in the region. However, on April 13, a local power grid company issued a document demanding that it stop illegal energy consumption directly from hydropower plants. In the region, miners directly negotiate tariffs with power plants, most often they are selling excess energy. This practice remains in the gray zone.
Some miners put up their farms for sale due to the deteriorating situation in the region. They are sure that the pressure of the authorities will not put an end to the local mining industry, but will increase the threshold for entry into it and transaction costs.
In late May, the authorities in the Chinese province of Sichuan demanded a ban on cryptocurrency mining. Otherwise, the administration promised to start an investigation and deal with illegal construction, take bans, fines, and other measures, including orders for the independent demolition of buildings.
How does this threaten the mining industry?
Over the past week, the volume of sales of the first cryptocurrency by miners increased. This may indicate the “extinction” of small representatives of the mining industry. According to the ByteTree service, over the past week, miners sold 11% more bitcoins than they mined. During this period, 5888 BTC were received and sold – 6561 BTC.
Miners are forced to sell cryptocurrency reserves to stay afloat. Halving, which took place on the Bitcoin network on May 11, made its mining unprofitable for small market participants. In this regard, they are forced to dispose of the mined to cover transaction costs.
BitXmi analysts say:
«Retail mining is gradually dying. At the same time, the current indicators of complexity and the level of hashrate indicate that it is far from the surrender of miners. After the collapse of the network power in early and mid-May, the hashrate is growing again. Of course, this can only indicate the distribution of network resources amid the disconnection of farms with old equipment. However, there are no danger signals that would lead the sphere to surrender»
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