BTC miners in Yunnan province lose power: reports

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Reports from the Chinese digital currency community signal that officials in China’s Yunnan province may be intensifying efforts to restrict block reward miners‘ access to the regional power grid. 

On November 30, China-based blockchain journalist Colin Wu posted on Twitter that Baoshan authorities have ordered electricity producers to stop supplying power to some block reward miners from the city. 

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, 2020

Baoshan is in the province of Yunnan. Yunnan is China’s third-largest province by BTC hash rate after Sichuan and Xinjiang. The alleged ban coincidentally appears to have coincided with a 24-hour decrease in the global hash rate, though there is no evidence that I’ve seen to suggest that the two incidents are directly attributable to one another. 

In his thread, Wu shared what appears to be a scanned copy of official documents issued to power producers. 

Wu cautioned against overestimating the impact of this incident. He theorized that what probably drove the ban was “more a demand for economic interests than political pressure,” adding “attitude of China local power companies towards crypto mining is often changing.” 

This incident is not the first time Wu has reported Yunnan authorities’ changing stance towards block reward miners. In June, Wu reported that officials in the region ordered 64 unauthorized mining operations to shut down, including seven still under construction. Officials cited tax evasion and security risks, including how the mining farms were wired to local hydropower stations, to justify the crackdown. 

Even as far back as April, Yunnan authorities were tightening their grip around digital currency-related businesses. The State Grid of Yunnan issued a document on April 13 demanding a cleanup and rectification of unauthorized power supply being directly from power plants to digital currency mining facilities. 

Because of the instability from incidents such as this, local miners might soon be at a crossroads where they either decide to continue down this chaotic path or look to set up operations elsewhere in nearby blockchain-friendly jurisdictions. 

See also: TAAL’s Jerry Chan presentation at CoinGeek Live on The Shift from Bitcoin “Miners” to “Transaction Processors”