Denied electricity, world's 5th-largest mining pool leaves China for Kazakhstan

Denied electricity, world's 5th-largest mining pool leaves China for Kazakhstan

BTC.com — a major crypto mining pool that is operated by BIT Mining and owned by the NYSE-listed Chinese lottery service provider 500.com — has announced the successful relocation of its first batch of mining machines to Kazakhstan.

BTC.com was founded by Jihan Wu and was operated by Bitmain and Bitdeer until its acquisition by 500.com this February. As of the time of writing, the pool is the world's fifth-largest, validating 10.4% of blocks on the Bitcoin (BTC) blockchain.

The relocation comes after the company was notified by the state grid in western Sichuan province that the power supply serving one of its local data centers would be suspended imminently. In its announcement yesterday, BIT Mining stated:

“On June 19, 2021, the Company's indirectly held subsidiary, Ganzi Changhe Hydropower Consumption Service Co. Ltd [...] received notice [...] from State Grid Sichuan Ganzi Electric Power Co., Ltd. [...] informing Ganzi Changhe Data Center, that its power supply would be suspended, effective 9:00pm Beijing time, June 19, 2021. Ganzi Changhe Data Center has since suspended its operations. Data centers in Sichuan, including the Ganzi Changhe Data Center, contributed approximately 3% of the Company's total revenues in the month of May 2021.”

The intervention from the state grid comes amid an ongoing crackdown on crypto mining by the Chinese state due to concerns over the mining industry’s carbon footprint, which runs counter to China's decarbonization targets.

In areas such as Inner Mongolia, once popular with crypto miners, regional authorities have even established a dedicated hotline for the local public to directly report any suspected illicit mining activities. Amid these pressures, at least three mining firms — BTC.TOP, Huobi and HashCow — have recently been driven to cease their activities on the mainland.

BIT Mining CEO Xianfeng Yang has gestured towards this backdrop, claiming that the company is “committed to protecting the environment and lowering our carbon footprint. We have been strategically expanding our operations overseas as part of our growth strategy. Following our investments in cryptocurrency mining data centers in Texas and Kazakhstan, we are accelerating our overseas development for alternative high-quality mining resources.”

While China has been an early mover against crypto miners, authorities elsewhere are increasingly signaling their concerns about power-guzzling mining sites; for the most part less on climate grounds than for their impact on local energy provision. In late April, a former government official argued that crypto mining was a major driver of the energy crisis in Kyrgyzstan. Similar concerns have been voiced in the Caucasus and Iran.

In line with China, global regulators and nonprofits, Elon Musk this year made a notorious intervention when he announced the company would no longer be accepting BTC as payment for vehicles due to concerns about the high energy consumption of Bitcoin mining.

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