The official warning says cheap electricity will run out for Inner Mongolia’s Bitcoin miners

Regional reports say that Inner Mongolia officials have outlined 21 bitcoin mines, as the region plans to stop subsidized electricity tariffs for some data companies. Unless bitcoin mining facilities pack up and migrate, mining farms could see a one-third increase in the price of electricity.

The Chinese editorial team Weixin revealed that bitcoin mining farms located in Inner Mongolia will no longer be able to access subsidized electricity. A blockchain journalist based in China, Colin Wu, reports that the Inner Mongolia Department of Industry and Information Technology issued an electricity policy notice on August 24.

A rough translation of the notice says it is called “Notice on Matters Related to the Participation of Mining Enterprises in Inner Mongolia’s Multilateral Electricity Trading Market.”

The Weixin report notes that at the end of 2019, a series of on-site inspections of more than 30 data and computer companies had detected 21 mining operations.

A large number of Chinese miners operate within the borders of Inner Mongolia, including a very large bitcoin mine located in the city of Ordos, operated by Bitmain. Officials in China’s Inner Mongolia Autonomous Region apparently imposed action in September 2019 in order to clean up “illegal” bitcoin mining facilities that capitalize on subsidized electricity.

Weixin’s recent findings also claimed that companies do not qualify or meet the criteria of Inner Mongolia’s multilateral electricity trading market. On Twitter, Wu he told his followers that officials “will raise the overall price of electricity by about 1/3”.

“The miners are worried [that] Xinjiang will follow, “added the reporter.

Responding to Wu’s tweet, some people were satisfied and hoped that the bitcoin miners would decide to migrate elsewhere. “Very good, hashrate [will] go to other places. You will be very welcome ”, the individual he wrote in response to Wu’s tweet.

Inner Mongolia’s multilateral electricity trading market was introduced in 2010 and was the first provincial energy market in China.

Since the introduction of the energy trading market, advocates believe the method is an effective approach to support the development of Inner Mongolia’s infrastructure.

Additionally, government officials exploit the energy trading market to cushion electricity exports to the rest of China. When the Inner Mongolia inspection team concluded on-site inspections of the data centers, investigators admitted that relevant departments could have recovered 6.732 billion yuan ($ 960 million) after removing some entities from the grants.

Last November, the Inner Mongolia Autonomous Region Department of Industry and Information Technology issued a notice on inspections and “rectification of virtual currency mining enterprises”.

The notice said that bitcoin mining has added nothing to the “real economy” and that consumers extract a huge amount of energy.

Chinese miners may need to find a way to avoid higher electricity prices, and some may need to develop in places like Malaysia, Kazakhstan, and Iran. Indeed, Chinese bitcoin miners have developed strong relationships in the oil-rich nation and cryptocurrency mining facilities in Iran.

Weixin’s report concludes that the cost of Inner Mongolia’s electric cargo for cryptocurrency miners is currently still lower than in Xinjiang and Sichuan.

What do you think of Inner Mongolia officials charging bitcoin miners ⅓ more than usual? Let us know what you think about this topic in the comments section below.

Image credits: Shutterstock, Pixabay, Wiki Commons, Cambridge Bitcoin Electricity Consumption Index – China