Here’s how Coronavirus impacts BTC mining capacity

Due to the Coronavirus outbreak in China, news reports indicate the Chinese government has enacted a series of measures that are negatively affecting local businesses all across the nation. Stories of quarantine control initiatives preventing people from their usual travel and rendering them incapable of going to work are rampant. The measures are deemed necessary to control the situation and mitigate the spreading of the virus. Bitcoin mining farms in China are one of the industries directly affected by these initiatives as some mining firms are being forced to close down during the epidemic. 

On February 4, Jiang Zhuoer, CEO of BTC.top, posted to Weibo that local police ordered all the mining machines to be shut down in one of the mining farms he owns in a remote region in China. Though the precise location of the mining facility owned by Zhuoer remains unverified, many comments on the Weibo post suggest that the farm is located in the province of Xinjian, particularly distant from the city of Wuhan, the epicenter of the epidemic.

Zhuoer adds that the firm has been told that it is still restricted from returning to work at present. He challenges the continually limited restrictions set upon them by the government authorities claiming that personnel at the mining farm have never stopped working, and none of the maintenance staff has ever left this area before the quarantine control period.

​Such closure of crypto mines is obviously harmful to the crypto mining industry as China has always been one of cryptocurrency mining’s largest markets, despite the substantial restrictions on trading cryptocurrencies in the nation. Most BTC miners are based in China, and the country still remains one of the top OTC trading hubs. Amid the internal issues plaguing China right now, including the Coronavirus, it remains important to recognize the crucial role the country plays in the crypto mining industry.

​Though the Chinese government bans the trading of digital currencies, the country remains the leader in BTC mining with an estimated 65% of the total hash rate. Despite the recent shut down of Chinese mining facilities, the hash rate of BTC mining continues to rise, mainly due to the speculative prices and manipulation of the digital currency. 

​China-based large suppliers of mining equipment, including Bitmain, Canaan, and MicroBT, are delaying aftersales services until February 10. Hardware manufacturer’s supply chain systems are already seeing an impact as local delivery and logistics companies now prioritize distributing necessities and supplies to those who are affected by the virus over less important deliveries. Some customers who pre-ordered miners might not receive the machines on time, while new orders might take longer if the outbreak continues. 

As Bitcoin halving continues to approach, the speculation is mounting surrounding the bull rally expected after the event. Some experts and commentators fear that if the China Coronavirus overlaps with the May 2020 event, there could be a significant impact on the supply of Bitcoin due to delays in the maintenance and delivery of new mining equipment. This also confirms the continuing need for the rise of mining facilities and hardware makers outside China.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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