The authorities of the Inner Mongolia Autonomous Region (China) could eliminate electricity subsidies to Bitcoin mining. This was reported on his Twitter account and on his blog by a reporter dedicated to covering the source in this area.
The information was also verified by the portal Decrypt. Apparently, the authorities are proceeding, alleging that the companies dedicated to mining activity do not make any contribution of retribution to the State.
Neither the region nor the local government receive any benefits from the companies dedicated to Bitcoin mining, they explain. In view of this, they argue that one way to obtain this benefit is through taxes.
Another region could act against Bitcoin mining
The firms dedicated to Bitcoin mining are in a state of distress. This is because nearby provinces like Xinjiang could emulate these government measures.
Currently, China ranks first in Bitcoin mining, with approximately 65% of the total hash rate. These two regions are among the most important in the country.
Reporter Colin Wu reports that the measure was suddenly announced on August 24 by the authorities.
It is worth noting that the region is one of the main bastions of the business. This is because it is a mountainous area with a cold climate. In addition, it has the great quality of offering electric service at low prices.
It should be noted that the measure does not affect all industrial activity, but the area of Bitcoin mining. Moreover, within the cryptomining, not all companies dedicated to this business would lose the benefit.
Authorities in Inner Mongolia, China, could eliminate the electricity subsidy they offer to Bitcoin mining companies.
In Inner Mongolia, local authorities could eliminate subsidies to Bitcoin mining, harming more than 20 large companies in this branch.
Mining pools are monopoly of Chinese companies
More reasons for decentralization
Since 2019, Bitcoin mining is moving towards decentralized mining. In that sense, we are in the middle of a migration of large Chinese companies to other parts of the world.
Recently, CryptoTrend reported on companies from China that are already establishing themselves in the Islamic Republic of Iran. This with the authorization of the Persian nation’s own authorities.
It should be noted that mining activity was recently decriminalized in that nation. Now Tehran is handing out licenses to individuals or companies that are engaged in digital mining.
The pressure from the Chinese authorities against Bitcoin mining is a matter that has become more acute. Although the authorities had recently relaxed, it seems that tolerance is not widespread.
Growth in mining activity in the US
Currently, business is growing in the West, mainly in the US. In that country, the big Bitcoin mining companies, such as Marathon and others, monopolize the sales of the Immediate Edge latest generation of equipment.
In other nations such as Russia and Kazakhstan, Bitcoin mining is also reporting important growth.
Another important aspect is the current economic crisis, caused by the Coronavirus pandemic. Many companies have been saved from bankruptcy by Bitcoin mining.
At the same time, inflation caused by government measures is driving investors to seek safe havens. Among them, gold and Bitcoin.
Such a situation is creating a demand for crypto currencies that can only be met by mining them.