Chinese Bitcoin miners forced to scale down operations
The majority of Bitcoin mining is done by mining pools; multiple miners who work together to mine Bitcoins and agree to share the block rewards once unlocked. Chinese mining pools account for over 80% of the network hash power, the largest of which is “Poolin” which mines 18% of all blocks (approximately 26 blocks per day). As a result, the centralisation of mining in China has become a significant issue for Bitcoin.
According to “Asia Times”, the authorities of the province of Sichuan are forcing Bitcoin miners to scale down their operations during the dry season because of electricity shortages. Two hydropower plants have already been fined for providing miners with electricity without authorization. Bitcoin mining has been criticized by the global community for using massive amounts of electricity, as much as the entire country of Switzerland, while people are trying to prevent climate change.
The timing puts Bitcoin miners in a difficult spot, as the dry season lasts from October till April, these are six-months preceding the Bitcoin halving where these miners rewards would drop from 12.5BTC/block to 6.25BTC/block. This crackdown from the authorities will have a significant impact on the miners in Sichuan which accounts for over half of the world’s mining hash power.
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