Alternative Electricity For Mining: China Wants Reduce The Cost Of Crypto Mining
Mining cryptocurrencies is a high-cost process, as it involves large financial costs for electricity, maintaining the operation of mining farms. There have repeatedly been cases when the cost of mining one Bitcoin exceeded its nominal value. This issue continues to be acute and pushes the crypto community to find a solution to this problem.
In China, the local government of Yaan proposed to use for mining alternative electricity produced by hydroelectric power plants. On April 20, the municipality published an official document calling on local miners to use alternative sources of electricity. To track the profitability of crypto mining using hydropower, the local government plans to conduct large-scale data collection.
According to local authorities, this initiative should attract new investors and bring the crypto industry to a new level of development.
China wants to regain leadership in crypto mining
China has long held world dominance in the volume of cryptocurrency generated. The largest mining farms with powerful equipment are concentrated here, which provide the largest share of the mined cryptocurrency in the world. According to the data, in 2019, local miners generated 66% of the hashes. In particular, Sichuan is considered a crypto oasis, as 54% of cryptocurrency is mined here.
The spread of the Covid-19 pandemic was a powerful blow to local miners. A high level of costs, a decrease in mining profitability, an economic crisis and an uncertain future have taken many well-known miners out of the game. In particular, Baite refused crypto mining.
Also, Chinese miners were faced with the problem of deterioration and obsolescence of equipment used for mining. Many mining farms use weak ASICS power, which reduces the profitability of the mined cryptocurrency due to the high cost of maintaining them. Thus, the use of hydropower for mining can be an excellent chance for a quick restoration of China’s unprecedented leadership in the crypto industry.