Bitcoin Hash Rate Takes Another Hit as Inner Mongolia Crypto Mining Shut Down Goes into Effect
This is positive for the crypto industry because Inner Mongolia is China’s second-largest coal producer, and such a move will push Bitcoin miners towards using renewable sources.
The hash rate of the Bitcoin network is yet again on a decline, down less than 30% from its all-time high a week back, per Bitinfocharts.
However, these are just raw values, and the accurate numbers, the 7-day average, have been much lower.
Already, the hash rate is back at 145 Th/s, up from 120 Th/s on Wednesday but still down from about 172 Th/s on May 13. Meanwhile, the difficulty is at an all-time high, and the block time that had surged to 14.4 minutes is now coming down to the regular ten minutes.
This latest dip in the hash rate came amidst the 55% crash in Bitcoin price, which went to $30,000 on Coinbase and some exchanges as low as $28,000. This dip, in part, was propelled by China banning Bitcoin FUD from re-entering the market.
However, as we reported, Li Bo, deputy governor of the People’s Bank of China (PBoC), had said last month at the Boao Forum that Bitcoin is an alternative investment and that authorities were studying how to regulate it.
One reason for this drop in mining power used to secure the largest network could be Inner Mongolia shutting down cryptocurrency mining entities coming into effect this week.
However, this directive from the Inner Mongolia Development and Reform Commission had already been issued a couple of months back. Miners in the region had already relocated their machines to other wet regions.
The region’s economic planning agency is cracking down on mining enterprises, miners disguising themselves as data centers to receive preferential tax and tariff treatment, landlords housing mining activities, and those who are utilizing power supplies illegally.
China’s northern region of Inner Mongolia is calling for more comprehensive reporting of crypto mining.
“This is to fully play the role of public supervision,” says a notice released this week by the agency. It also shared its telephone numbers and email addresses for people to report instances of digital currency being mined.
This is good because Inner Mongolia is China’s second-largest coal producer, and such a move could help push Bitcoin miners towards using renewable sources.
“The hashrate of China's entire network is about 50%, but the use of clean energy in China has also exceeded 50%. Sichuan mainly uses hydropower,” said local publication Wu Blockchain.