As the Chinese government clamps down on the bitcoin mining business, a Chinese logistics company is airlifting 3 metric tons (3.3 tons) of bitcoin mining equipment to Maryland.
CNBC’s senior reporter in Beijing, Eunice Yoon, posted photos on Twitter Monday that seemed to show the equipment packed and ready to be flown. Fenghua International, headquartered in Guangzhou, informed CNBC that it is airlifting 3,000 kilograms (6,600 lbs) of machinery to Maryland.
#China logistics firm in Guangzhou confirms to @CNBC it’s airlifting 3,000kg (6,600lbs) #bitcoin mining machines to Maryland, USA. Fenghua International advertises products delivered to door, tax on both ends cleared. Price per kilo: as low as $9.37! #cryptocurrencies pic.twitter.com/8yUjZjhpkk
— Eunice Yoon (@onlyyoontv) June 21, 2021
The CNBC pictures fit with a growing narrative about bitcoin’s flight from China, but the Fenghua cargo is a relatively modest quantity. The current crackdown on bitcoin mining has resulted in partial bans in a number of regions.
China’s Clamping of Bitcoin Mining
The People’s Bank of China has ordered that all cryptocurrency services, including account opening, transactions, and settlements, be discontinued.
The Central Bank reportedly questioned five banks, including Alipay, as part of the country’s wider crackdown on the industry, and ordered them to abstain from conducting crypto-related business.
Other banks include the Agricultural Bank of China, the China Construction Bank, the Postal Savings Bank of China, and the Industrial Bank.
The Central Bank’s announcement comes amid China’s wider efforts to crack down on the cryptocurrency sector, especially via the mining industry.
One of the most serious crackdowns occurred in China’s Sichuan province, which is known for its Bitcoin mining.
After Sichuan ordered energy providers to stop supplying power to mining farms in the province, hash rates of some of the largest Bitcoin mining pools in China have fallen by up to 37%.
Many of the miners in these pools use Sichuan’s plentiful hydroelectric power, making Chinese mining pools an important part of the global crypto economy.
Cryptocurrency mining pools are groups of people that pool their computing resources to mine cryptocurrency. The energy firms were sent a closure notice that specified 26 mining pools in Sichuan province.
Bitcoin Mining’s Future
Chinese officials are clamping down on cryptocurrencies this year in order to reduce energy usage and achieve their climate objectives, dispersing miners.
Miners are rapidly emigrating to areas like Texas, South Dakota, and Canada, igniting a mass movement that will have ramifications for the developing industry as well as the new towns that will house it.
There are also concerns regarding the capacity of local electricity networks. For transactions and other tasks like generating fresh cryptocurrency supply, digital currencies need a lot of computer power.
To keep the systems operating, a lot of energy is required – typically measured in gigawatts, or 1 billion watts. The more a cryptocurrency system expands, the more energy it consumes.