Sichuan floods slow down global Bitcoin production rates
Worldwide Bitcoin 'hashrates' fell after heavy rain hit western China. Despite PRC crackdowns, China mines still produce most of the world's Bitcoin
Extreme weather is reportedly effecting the efficiency rate of crypto-currency mining. Global Bitcoin “hashrates” – the speed at which computers are completing crypto mining “tasks” – dropped last week, and, according to the Financial Times, this was partly caused by flooding in Western China.
Despite a series of clampdowns by the PRC in recent years, against not only crypto-currency trading but also crypto mining, Chinese “mines” are still thought to be producing significantly more than half the world’s Bitcoin.
Many of these operations are located in the western province of Sichuan province that, because of its mountains, has a cheap and abundant supply of hydro-electric power. One of the main criticisms of crypto-currencies – aside from the accusations of market price manipulation and links with criminality – has been about the power hungry nature of these mining operations, that use ever-growing networks of super-fast computers.
The Economist this week estimated that global Bitcoin mines now consume the same amount of energy as the country of Ireland.
The Financial Times wrote that data indicates the floods caused hashrate drops of up to 30%. Sichuan, Yunnan and Hunan provinces saw heavy rain during most of last week, with some western areas witnessing hourly fall rates of up to 50mm. According to numerous social media posts, many mines were simply washed out, but the fact that it caused such a drop in global Bitcoin production rates offers, says the FT, “a glimpse of what might happen if China succeeds in wiping out its Bitcoin mining industry.”
Japan has also suffered badly from floods and landslides in the last few days after torrential downpours killed more than 100 people and this has led Changpeng Zhao, the CEO of the world’s largest crypto change Binance, to start a donation campaign to help bring aid to Japanese flood victims.
“Our hearts go out to the victims in West Japan” wrote Zhao on his Twitter feed on Saturday. “@binance will begin with a $1,000,000 equivalent donation” that he says will be made either in crypto-currency or Japanese Yen. “We also ask our crypto partners to join us and help our friends in need.”
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