- Sichuan city in China is dealing with surplus hydroelectric power that has pushed the price to 3 USD cents.
- Bitcoin miners have been encouraged to seek permits and take advantage of the cheaper electricity.
- Cheaper sources of electricity could ensure miners remain profitable even if Bitcoin price fails to rally after halving.
Bitcoin block reward halving is 14 days away. With it comes uncertainties in regards to if the price will rally or remain in the range between $7,000 and $8,000. Miners are particularly preparing for various scenarios as their profits could be significantly affected. Note that Bitcoin halving happens every four years. The rule in the code is to slash by half the reward extended to miners per block mined. In this case, miners will receive 6.25 BTC from the current 12.5 BTC.
China’s Sichuan local government keeps miners optimistic
The city of Sichuan is dealing with a situation where there is a surplus in electricity. The local government has come up with a policy in support of blockchain mining, perhaps to encourage the use of the excess electricity. At the moment, the cost of electricity has fallen to around 0.20 CNY or 3 USD cents.
For Bitcoin miners, this development is good news in regards to the upcoming halving. If the price of Bitcoin rallies after halving, most miners will remain profitable, preventing miner capitulation. However, if the price remains in the current range, most miners could stop operations due to higher operating costs and low profits. On the other hand, cheaper electricity could ensure that miners remain in their profit margins.
This is optimistic for large bitcoin miners in China, especially in Sichuan.
— Joseph Young (@iamjosephyoung) April 28, 2020
After halving, if BTC remains in $6~$7k, F2Pool co-founder said there is real risk of more mining machines shutting down.
But, he also said cheaper electricity can protect miners, which is happening. https://t.co/HDjYC56BOk
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