Select Page

China Banned Bitcoin Mining. What Happens To Small Hydropower Stations Now?

China Banned Bitcoin Mining. What Happens To Small Hydropower Stations Now?
Loading...
This article is added for educational purpose only. All credit goes to the respected author of this article. All In One Crypto App do not hold any liabilities of this article. You can get the source link at the end of the article content.

This China Business News report about hydropower stations will blow your mind. It contains revelation after revelation and clears the situation up. Now that Bitcoin mining is prohibited, who’s consuming that energy? How has the government decision affected private enterprises? Well, you’re not going to believe this.

It all started with this tweet by Chinese journalist Colin Wu.

The first paragraph of that article clears up what Colin Wu’s first tweet’s all about. Namely, that in the “largest second-hand trading platform, private hydropower stations are being sold in large numbers.” Why is that? Well…

In the power industry, a hydropower station is sometimes regarded as a tireless money printing machine. But after ten years of investing in a small hydropower station in Sichuan, Zhang Huifa decided to sell the power station for more than 60 million yuan on the second-hand trading platform Xianyu.

The plants are “mainly distributed in Sichuan, Guangxi, Gansu and Yunnan.” Both Sichuan and Yunnan were Bitcoin mining hubs, according to Nic Carter’s report. The reason all of this is happening is that “the huge initial investment and long return on investment often pose huge challenges to investors.” 

Related Reading | Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners

Apparently, many of the owners had to take out loans. A decade later, in order to finish paying it, they have to sell the power stations. Or at least that’s what the article tries to convey. 

Abandonment Of Electricity

According to the article, the heyday of private power plants was the beginning of the century. Investors built thousands of hydropower stations because they saw them as a constant cash cow. For their part, the regions nearby saw them as a sign of progress and a solution to their energy problems. 

However, with the gradual surplus of electricity in China in recent years, the electricity generated by hydropower stations is often faced with the fate of being abandoned (commonly known as “abandonment of electricity”)

Now, Google did most of the translations. So, maybe the phenomenon is not “commonly known as “abandonment of electricity” in other areas of the world. However, the fact remains: Bitcoin mining tends to go where there’s surplus energy available, as our sister site Bitcoinist already told you. The reason for that is simple: energy is cheaper in those areas.

BTC price chart on FTX | Source: BTC/USD on TradingView.com

Are They Selling Hydropower Stations Due To China’s Ban On Bitcoin Mining?

According to China Business News, nothing could be further from the truth:

Some people have linked this transfer behavior to the ongoing rectification of virtual currency “mining” operations. Many small hydropower stations have indeed benefited from “mining”, but the sellers contacted by the CBN reporters all stated that they had their own reasons for the sale.

To prove this, they go into the numbers. In 2011, this one plant sold all the power it generated to the State Grid. 

But in 2016, the operator built a Bitcoin “mining” plant near the power station. He rented it out to companies that came to Sichuan to “mine.”

After that, the wind shifted and the tables turned:

In 2016, the power station’s electricity revenue from the State Grid was 4.6 million yuan, and the electricity revenue from Bitcoin mining companies was 1.8 million yuan. However, by 2018 the two numbers turned into 2.7 million yuan and 4.1 million yuan respectively.

Losing all of that revenue is reason enough to sell, and that was Colin Wu’s interpretation of the situation. However, the article’s subjects offer another perspective:

Zhang Huifa said that the main reason for the sale of the small hydropower station was the difficulty of capital turnover in the real estate sector he invested in. Li Chengming said that the reason for the sale of the small hydropower station was that he did not want to continue taking care of it, even though the hydropower station produced a stable income of hundreds of thousands of yuan per year.

But, are they telling the truth?

The Human Side Of Hydropower Stations

The article does a great job selling the story. They immediately explain the psychology and the mental state of its subjects in a way that makes the reader identify with their situation:

They are all in their 50s and 60s and need to return home to look after their families. The younger generation prefers to go to big cities. No one wants to go to the deep mountains and old forests where these small hydropower stations are located.

And to top it all off

“Many small hydropower stations generally require only one employee to be guarded. Staying in that kind of place all the year round can make a person feel very lonely.” Some of them said, “You don’t know how to deal with the sound of running water every day. Someone say something!”

That sounds terrible. A question arises: What’s the article’s game? Are they trying to make sure those private hydropower stations don’t sell? Or… is this some kind of reverse psychology play?

The Revelation: They Might Be Trying To Get Rid Of These Hydropower Stations!

The article finishes with a bomb that explains everything:

According to 2020 statistics from the Sichuan Provincial Department of Water Resources, there are 5025 small hydropower stations in Sichuan. Out of those, 4774 are involved in rectification and decommissioning. It’s estimated that 1091 will be decommissioned and 3683 will be rectified. 

There’s a reason for that:

“Hydropower stations have always been one of the important factors restricting the ecology of Sichuan’s rivers.” Wang Hua, deputy director of the Sichuan Provincial Water Resources Department, said in 2020

It’s possible that the government is trying to get rid of those plants. That would explain the article’s tone, it seems like it was trying to get investors to stay away from those hydropower stations. In light of this, China’s ban on Bitcoin mining could be just a part of an even bigger play. They’re serious and methodically shaking things up over there. 

Related Reading | Pakistan to build Bitcoin mining farms in pilot program

What could be their end-game? Is China just trying to go carbon neutral and repair the original flow of the rivers? Or is there something else at play here?

Featured Image by Gary Yost on Unsplash - Charts by TradingView

 

Source: NewsBTC

 


All In One Crypto App presents a unique dynamic crypto course that allows you to become a profitable and successful trader. Download Now
Loading...

Don't forget to share your review/suggestions for android app.

All In One Crypto App is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by All In One Crypto App or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.es here
Loading...

Categories

Select Sub Category
category
6146c52f9a2f0
1
1
Loading....

Reviews

All In One Crypto App

Made $234 profit with Free Signals from $50

This is the best useful app on my phone. Started trading with $50 and in 5 weeks I was up to $234 just with the free signals. I will recommend it to any new person that wants to try trading crypto. Link to Review

Asoluka Chimdindu

Free User
All In One Crypto App

Good Support

This app is one of the best for crypto currency trading signal for experts and beginal with free and premier with auto follow trading bot all the signal is excellent with accurate technical analysis and fundamental I really like the way they guide and support. Link to Review

olaplus olaplus

Premium User
All In One Crypto App

Accurate Trading Signals

I was premium member of this channel back in 2018 when there was no app. Thr signals were too good, more than 90% accuracy. Now with this app and newly introduced auto trading bot, it will be awesome. Too the moon. Link to Review

Yogesh Patil

Premium member
All In One Crypto App

Awesome and Accurate Signals

Very glad to use this app. The crypto signals was awesome and accurate with detailed explanation and visual information. The admin also helpful and nice. Link to Review

soon cheong

Free User
All In One Crypto App

User Friendly App

Signals are great. I love it. App also friendly to use… Nice job guys Link to Review

Olawunmi Dilureni

Premium Subscriber

Recent Comments