Wednesday, May 29, 2024

How the last crypto mining haven in China fell

The Ngawa Tibetan and Qiang Autonomous Prefecture in the Sichuan Province of southwest China was full of noises generated by high-power computers for more than a year. The noises were a stark contrast to the otherwise quiet region of China, the landscape of which has an abundance of natural beauty.

The computers were owned by a firm that dealt in cryptocurrency mining. When the facility’s mining operations were running at their peak, their estimated earnings amounted to over a whopping $90 million yuan or $14 million. The profits were especially astounding during this period, as electricity expenses were cheap, thanks to the high water flow in the rivers of Sichuan Province.

However, on June 19, 2021, the facility’s operations came to an abrupt halt. A notice from the Chinese government that came the day before stated that the facility had to be closed along with 25 other crypto mining projects that were located in Sichuan Province. It was yet another victim of the Chinese government’s brutal crackdown on crypto mining and trading operations. However, the warning signs were there, as the Chinese government’s top brass had frequently criticized cryptocurrencies and the risks involved in mining and trading them.

Today, companies have been completely banned from mining and trading cryptocurrencies in China. However, the law still permits individuals to trade. Perhaps that’s what will happen to the individuals who worked at the mining facilities shut-down in Sichuan Province and other parts of China. However, individuals can’t operate the way that elaborate mining projects can – their only option is to run operations by downsizing and purchasing old equipment.

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