A Chinese municipality has formally requested Beijing’s permission to allow it to offer surplus electricity to the region’s “blockchain industry” – believed to be code for bitcoin (BTC) miners. The move could have potential knock-on effects for the wider crypto community, and could see potentially reduce BTC mining costs in the lead-up to the next bitcoin halving event.
In an official release from the local government of Ya’an, a prefecture-level city in the western part of China’s Sichuan province, city authorities stated,
“The central government should look for strategic opportunities with the blockchain industry to make use of excess hydropower.”
Although the document studiously avoids making direct reference to bitcoin or other cryptocurrency mining, Beijing has softened its stance on mining following the 2017 crypto crackdown.
In November last year, Beijing reportedly removed crypto mining from the list of industries that might be eliminated.
And, as Japanese media outlet Coin Post highlights, a large number of BTC miners are believed to have set up shop in Ya’an, where a “blockchain hub” is now being built. An existing facility registered as a “blockchain data center” in the region is also thought to be a fully functioning bitcoin mining farm.
The move could well be timed to coincide with Bitcoin’s next mining reward halving, estimated to take place in two weeks. Chinese miners are already responsible for the biggest share of Bitcoin hashrate, or the computing power of the network. Being able to continue working with cheap electricity in order to control lower costs Chinese companies would have an advantage while it also might slow down a fall in Bitcoin’s hashrate after the halving.
China-based Bitcoin mining pools are responsible for more than half of the network’s computing power: