Local media reports reveal that electricity producers in Yunnan, China’s fourth-biggest province by Bitcoin hash rate, have been compelled to stop providing power to crypto miners. Authorities from the city of Baoshan are increasing their efforts to crack down on bitcoin miners.
On November 30, Chinese crypto reporter Colin Wu posted on Twitter stating that many miners had told him about the ban. He shared what seems to be scanned copies of official documents issued to the power producers:
Several miners told Wu that Baoshan, Yunnan, where China’s crypto mines are located, received a ban on November 30, requiring the power station to stop supplying power to the miners. Yunnan is the third largest mining place in China after Sichuan and Xinjiang. pic.twitter.com/1zAhcTLmXi
— Wu Blockchain (@WuBlockchain) November 30, 2021
Nonetheless, Wu said that the ban might have come up due to economic interests and maybe it is not indicative of a desire to bash crypto mining on the part of the Chinese government:
“There is no need to overestimate the impact of this incident. The attitude of China local power companies towards crypto mining is often changing. It is more demand for economic interests than political pressure.”
Interestingly, the ban seems to have coincided with a 24-hour drop in the global hash rate of about 10% from 140 exahashes per second to 125 EX/s. But, correlation is far from causation.
Cambridge University’s Bitcoin Electricity Consumption Index, or BECI, indicated that Yunnan was China’s fourth-largest region by mining hash rate. As of April 2021, only Xinjian, Sichuan, and Inner Mongolia were bigger. Yunnan then represented about 5.42% of the global hash rate which ranked it above all of the countries except for the United States, China, Kazakhstan, and Russia.
Sometime in June, Wu reported that Yunnan’s government had already ordered up to 64 unauthorized mining operations to shut down. The number included seven that were at the moment under construction. Beijing cited tax evasion and security risks including how the mines were wired to the local hydropower stations.
In the same month, a local bitcoin mine caught fire which resulted in the incineration of thousands of units. The mid-year crackdown also came after a May 29 explosion at a hydropower station in Yunnan province which resulted in the death of six people and injured five. That explosion was believed to have caused greater enforcement of safety standards about hydropower plants in the area.
In April 2021, Yunnan’s state grid also published a document warning the electricity producers against the unauthorized diversion of power to bitcoin mines.