Bitcoin Miners in Sichuan Turned off for Electricity Shortages as Rainy Season Delays

Some bitcoin mining farms in the Chinese province of Sichuan have been reportedly turning off their mining machines due to electricity shortages

A local government notice released on May 18 indicates that the electricity load within the region has increased by 22% since May, meanwhile, water flow in local rivers, however, has decreased by 20% resulting in a shortfall in hydroelectricity supply.

Document picture from crypto news outlet Blockbeats

Under such a circumstance, some areas may suffer power shortages at times of peak demand, and the prolonged high temperatures will further aggravate the tension. The document said that while managing to increase power supply, authorities would strengthen monitoring and timely handling of power-hungry operations.

Although it is not specifically mentioned in the notice what operations are under close monitoring, bitcoin mining is an activity that is known for its reliance on the intensive usage of electricity.

According to some local mining farm operators, rainy season (which usually starts in May) this year has delayed, and the prolonged high temperatures in Sichuan have led to a surge in electricity demand, resulting in the fact that some of the power supply for bitcoin mining was diverted to first meet residents’ and local businesses’ use.

“Some mines have got power cut for over three days, and some are only allowed to mine during the night. Areas close to Sichuan’s capital city Chengdu like Wenchuan are suffering from severe power outages, while remote places like Ya’an and Kangding, with small electricity demand and sufficient rainfall, see few power failures.”

But for miners, the unstable factors of the rainy season are well known and mining during that period is a risky business itself. The rainy season in 2019 has tortured miners, as it began with no rain in the first month and later rainstorms ruined many mines.

Another factor in this year’s rainy season is the change of local government’s attitude towards bitcoin mining operations. With the introduction of hydropower consumption zones, local governments in Sichuan have stepped up their support for compliant mining operations.

Though it is believed to be good news for the mining industry, especially for those new players coming to the game, veteran miners, however, worry there would be a tougher crackdown on existing mines that might have illegal construction issues or tax problems. Earlier this month, a mining farm in Wenchuan, Sichuan was allegedly sealed up by tax and environmental protection department and fined 10 million Chinese yuan ($1.4 million) with all mining machines detained.

For the time being, inadequate access to energy is the largest impediment to bitcoin mining. It seems rains may not begin until late May or early June this year, according to the local weather forecast.

Bitcoin mining difficulty, a metric that shows how hard it is for miners to solve bitcoin blocks to receive the reward, decreased by 6% yesterday in response to the dropping hashrate after bitcoin’s third halving. The downward adjustment indicates more miners stop mining in the past 2 weeks.

If the rainy season in the world’s bitcoin mining capital still refuses to come, it remains to be seen whether more mines will be forced to shut down their machines and to what extent will the bitcoin network’s hashrate and mining difficulty be influenced.

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