Bitcoin mining farms in China's Inner Mongolia region are set to face higher electricity prices after a government crackdown
August 28, 2020, 6:40AM EDT
1 min read
Twenty-one bitcoin mining farms, including those of Bitmain, Ebang and China Telecom in China's Inner Mongolia region, are set to face higher electricity prices after a local government crackdown.
Inner Mongolia's Department of Industrial and Information Technology issued a notice to Inner Mongolia Power Group on Monday, saying that 21 bitcoin mining farms should be disqualified from getting discounted energy because they were disguising themselves as big data and cloud computing companies to get electricity benefits.
As a result, electricity prices for these farms are likely to increase by 0.1 yuan, or $0.015, per kilowatt-hour (kWh), PoolIn CEO Kevin Pan told CoinDesk. The current electricity cost for mining farms in the region is reportedly around 0.26–0.28 yuan ($0.038 to $0.040) per kWh.
The higher electricity prices, in turn, would result in higher operating costs for these mining farms. If a mining farm is running at a capacity of 10,000 kWh, that will reportedly result in an additional $3,360 operational cost per day.
The real impact of this news, however, is yet to be seen on China's mining industry, Thomas Heller, former F2Pool executive and now COO of bitcoin mining firm HASHR8, told The Block. This is because "there are a number of large coal-powered mining farms in Inner Mongolia, and many more in other parts of China, such as Sichuan and Xinjiang."
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