Here’s what Yunnan actually does with bitcoin mining – –

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Here’s what Yunnan actually does with bitcoin mining – –


Last Friday, a screenshot of an alleged Chinese government document caused confusion over an alleged ban on bitcoin mining in China’s Yunnan province.
News outlet Crypto Forkast first reported that Yunnan was set to ban local bitcoin miners following moves by their counterparts in Xinjiang and Inner Mongolia, citing a screenshot of a document. which appeared to be from the Yunnan Energy Bureau. CoinDesk also reported on the news, citing the Forkast article as the source.

Both media then revised and corrected their initial reports, arguing that the screenshot of the document was a forgery, as its format did not conform to the typical appearance of authentic Chinese government documents. CoinDesk also published a follow-up article to clarify that Yunnan is not banning bitcoin mining.

But the reality seems more nuanced than that.

Bitcoin mining farms are inspected

While the format of the screenshot of the supposed document may seem off-kilter, it is not impossible that the essence of the screenshot speaks to what is happening in Yunnan.

China Star Market, an outlet under the state-owned Shanghai United Media Group, said in a press alert on Saturday that the Yunnan Energy Bureau had confirmed at the outlet that it was demanding government departments. Energy subordinates of the province that they completely inspect bitcoin mining operations in late June.

In fact, the China Star Market information alert was also identical to the essence of the screenshot circulating on Friday, but the outlet did not say whether the screenshot was genuine.

Below is an unrelated but genuine document from the Yunan Energy Bureau Below is the screenshot that circulated last week

Neither China Star Market nor the circulating screenshot specifically mentioned that Yunnan Province was about to impose a blanket ban on bitcoin mining.

The media report said that the Yunnan Energy Bureau requires subordinate departments to inspect and then shut down or rectify bitcoin mining farms that use unauthorized hydropower. This includes power plants that directly supply power to bitcoin mining farms without paying a reduction in profit to the government.

This is a fairly common practice but in a gray area in Yunnan and Sichuan, where power stations provide hydroelectricity directly to mining farms without going through the energy grid. It reduces the operating costs of mining farms by preventing them from having to share the profits with the State Grid and local government.

It remains to be seen what the next step will be when the Energy Bureau completes its inspection of unauthorized energy use by bitcoin mining farms.

Yunnan, along with Sichuan, are the two main hydropower-powered bitcoin mining centers. But neither has released concrete action on the future of bitcoin mining in their region following the State Council’s comment on cracking down on bitcoin trading and mining activities. .

It was reported that China’s ambition for high-level carbon neutrality was behind the comment by the State Council. This likely led to the rapid action seen in the coal mining regions of Xinjiang and Inner Mongolia. Xinjiang has ordered miners in its Zhundong Economic and Technological Development Zone to shut down their operations. Inner Mongolia, which had previously ordered the closure of minors, identified a set of consequences if they do not obey.

© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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