The price of Bitcoin was hit Monday morning by the shutdown in energy supply imposed on mining farms in the Sichuan region of China.
China has decided to strike a blow against this activity, which contravenes its objectives to reduce CO2 emissions. These closures had an immediate impact on the validation process of transactions in cryptocurrency.
Until recently, China concentrated 70% of the world’s Bitcoin mining capacity, according to the University of Cambridge. But the Chinese authorities have decided to go on a crusade against these crypto-assets, accused both of being a threat to the Chinese financial system and of undermining its environmental ambitions. Because the large quantities of electricity consumed by these farms come from coal factories. According to a recent study published in Nature, if no action is taken, this industry could produce the equivalent of the carbon emissions of Italy or Saudi Arabia by 2024.
In recent months, several provinces have ordered the closure of businesses in the sector established in their territory. Mining companies in Xinjiang, Lower Mongolia, and Qinghai, areas sparsely populated but rich in coal and hydroelectric power, have had to shut down as residents are encouraged to report illegal activities in this area.
Until now, Sichuan tolerated activity because farms had more recourse than elsewhere to surplus production from hydroelectric factories. But the ban, in turn, fell, leading to the closure of 26 companies. According to AFP, the information has not been confirmed by the authorities but by former cryptocurrency producers. ” Checks are carried out to ensure that we actually end operations and remove the machines ” testified one of them.
According to these sources, energy suppliers have been ordered to stop supplying electricity to these companies before Sunday. On Sunday evening, the supply of energy to these companies was completely stopped, according to Chinese media.