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Bitcoin mining companies face shutdown in southwest China

By Li Yan (People's Daily Online)    20:39, June 01, 2017
Bitcoin mining companies face shutdown in southwest China

Bitcoin mining companies have been shut down or relocated in Mabian Yi Autonomous County, home to a prosperous mining industry in southwest China’s Sichuan province, and the reason for the phenomenon is unclear.

The shutdown is made more puzzling by the fact that the value of Bitcoins has exceeded 10,000 RMB ($1,469.6), and many exchange platforms are battling for mining resources after the Central Bank of China banned the deposit and withdrawal of Bitcoins.

Local Bitcoin miners say they were not forced to relocate, but they are reluctant to talk more about the shutdown. The Bajiaoxi Mining Factory located in Bajiaoxi Hydropower Station is one of them.

Due to the shutdown of the mining company, the hydropower station is set to lose some one million RMB ($147,000) in electricity charges per month. A mining company owner said they too will suffer big losses from the shutdown, as well as from the costs of relocation and construction as they look for another suitable location.

Mining Bitcoins is a global effort, so even if mining is banned somewhere, the total amount of Bitcoins does not change, and so the global price will not fluctuate, an industry insider said.

Another industry insider reluctant to reveal his name said China is home to the largest amount of Bitcoin factories in the world, but the industry is under loose supervision.

A staff member from the information office of the State Gird Sichuan Electric Power Company said managing the electricity consumption of the Bitcoin mining companies is beyond their supervision, as those companies directly use electricity generated by the hydropower stations.

A local official said the closure of the Bajiaoxi Mining Company aims at cracking down on illegal cash operations and on controlling systemic risks. But documents show that the mining company is not involved in any illegal activities.

Zhang Jun, a senior researcher with the Taiyiyun Strategic Research Center, said if the mysterious closure of the mining companies forced them to conceal their mining activities, it would harm supervision efforts and would not improve the livelihood of mining workers. Bitcoin miners want the industry to be regulated so that they do not have to hide, he added.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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