Hash rates of some of China’s largest bitcoin mining pools have fallen by as much as 37% after the order came to stop providing power to bitcoin mining pools in the Chinese province of Sichuan.
News about the closure order broke yesterday after a meeting between the country’s science and technology bureau and the Sichuan Provincial Energy Bureau.
Energy companies have announced until the beginning of Sunday, June 20 (Beijing time) as the date to cut off electricity to these complexes.
Chinese mining pools are an integral part of the global cryptocurrency ecosystem, and many of the miners in these pools derive electrical power from the abundant hydropower in Sichuan Province.
For information, a mining pool is a group of miners who gather their devices together, with the aim of jointly mining cryptocurrencies by pooling computing power.
The closure order distributed to energy companies identified 26 mining complexes in Sichuan Province.
Molly, the chief marketing officer of the Chinese blockchain development company Hashkey Hub, tweeted that the hash rate had already dropped dramatically after Sichuan Province announced that it would cut power to Bitcoin mining farms.
The results of cutting off electricity to mining pools in Sichuan Province began to appear, as mining speeds in the “AntPool” mining pool decreased by 27.53%, while the mining speed of “BTC.com” pool decreased by 18.34% and “Huobi.pool” decreased by 36.79%.
China has been cracking down on cryptocurrencies for the past few months.
China’s negative move towards Bitcoin has had a huge impact on the global price of the cryptocurrency.
The current decline is the worst crash in bitcoin since its inception and bitcoin is close to recording its worst second quarter in 8 years.
Why is China moving to ban Bitcoin mining?
The country’s crackdown on cryptocurrencies such as Bitcoin and Ethereum, which are difficult to regulate, are paving the way for China to launch its own central bank-backed digital currency:
China is currently experimenting with digital currency, which, as of yesterday, can be converted into fiat currency at more than 3,000 ATMs in Beijing.
Given China’s profound impact on cryptocurrency mining and market capitalization, today’s drop could dramatically reshape the Bitcoin mining industry beyond what we knew it to be.