Sichuan, a province of China, is transforming into a global Bitcoin mining capital primarily due to its cheap electricity, low population density and cold climate.
China’s southwestern provinces, such as Sichuan, are seeing an exponential growth of Bitcoin mining facilities and centers as companies continue to search for mountainous regions with high altitude to cool down mining equipment without allocating additional resources.
According to major local publications, including the China Money Network, more than 20 mining companies and 10,000 Bitcoin miners are located within Sichuan’s Mabian Yi Autonomous County, a cold and mountainous region with just over 215,000 residents and Kangding, a region within Sichuan well known for its natural beauty.
Decreasing electricity costs
One of the major reasons behind the rapid growth of mining companies within the Sichuan province is the decreasing electricity costs, as mentioned by various respected Bitcoin experts including Andreas Antonopoulos and Chandler Guo in the past.
In an interview with Ether.Camp, Bitcoin miner and investor Chandler Guo revealed that electricity in China has become so cheap due to rising supply and decreasing demand that electricity companies are coming to local miners to purchase ASIC chips and mining equipment to allocate unconsumed electricity to Bitcoin mining
From the perspective of electricity companies, it is an intelligent and resourceful method of profiting from a surplus of electricity, as they receive Bitcoin in return which is highly liquid especially within a market like China which operates a well developed and regulated Bitcoin exchange market.
“Today, the energy companies are jumping on the Bitcoin mining business. Before that, we [miners] bought electricity from them [energy companies] to mine Bitcoin. Today, the seller who is selling electricity to us, they’re mining Bitcoin by themselves. [Energy companies] don’t sell electricity to us, they buy mining equipment from us. A lot of energy companies are becoming Bitcoin miners. Even small energy companies can buy at least 1 to 2 petahashes.”
Another major issue which miners and mining facilities struggle to deal with is noise resulting from high intensity and performance mining equipment. A manager of Mabian Tianjia Network Technology, a Chinese mining company, stated that mining facilities are migrating to remote regions with a limited number of residents so that they won’t have to deal with noise complaints.
“This room has 1,500 Bitcoin mining machines, our largest in this location, and can produce nearly 10 Bitcoins every day,” said a manager at Tianjia.
With a cold climate, very cheap electricity and low population density, remote provinces in China such as Sichuan are transforming themselves into global Bitcoin mining hubs.