Banned Crypto-Miners Siphoning Power from Chinese Public Firms
China was once a burgeoning hub for digital currencies, but the country recently came out against cryptocurrency. With transactions and mining banned, officials are on the hunt for illegal crypto operations, and extreme power usage often points the way. As reported by Bloomberg, two provinces have found that a substantial chunk of illegal mining was happening at public institutions. Naturally, the government aims to put a stop to that.
As recently as last year, China accounted for the majority of Bitcoin hash rates. Since then, mining has moved to other regions, and the drop has been precipitous since the Chinese government began its crackdown on all cryptos. After officially banning crypto, the government instructed provinces to call in loans, cancel favorable tax rates, and investigate abnormal power usage. That last order has led to the discovery in Zhejiang and Jiangsu provinces that thousands of miners were siphoning power from public institutions.
When mining cryptocurrency, you need to connect to an online pool to verify transactions on the blockchain. Over time, a miner earns crypto as a reward. However, the IP addresses in a pool are visible, and officials noted that many of them were government connections. In Jiangsu, investigators discovered that one-fifth of 4,500 IP addresses engaged in illegal mining were associated with public institutions. In Zhejiang, the government found a more modest 184 IP addresses that were leaching energy from public resources.
Authorities have begun raiding suspected mining operations, including those stealing power from public facilities. Zhejiang has even posted images of some of the seized hardware. So, gamers can look on with envy at rigs with dozens of GPUs (see above), none of which have ever rendered a single polygon. Crypto mining is one of several factors that have made buying a GPU essentially impossible for the last 18 months. While there was hope that China’s crackdown would free up some GPUs for the rest of us, the trends are moving in the wrong direction.
The crackdown and subsequent power looting comes as China faces tightening power reserves. Coal is in short supply, and large areas of the country are still heavily dependent on dirty coal-fired plants. “The rapid upgrading of mining hardware and fierce competition in computing power have resulted in massive energy usage, which is contrary to the carbon peak and carbon neutralization goals of the whole province as a major energy importer,” the Zhejiang government said in a statement. The statement didn’t mention punishment for the perpetrators but notes that illegally obtained proceeds were recovered.
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