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Bitmain Deploys 100,000 Mining Rigs in Sichuan Province for Cheap Hydroelectricity During the Wet Season

The bitcoin mining giant Bitmain has deployed 100,000 mining rigs in Southwest China’s Sichuan Province two months before the arrival of the wet season, betting cheap and abundant hydroelectricity this summer in the region will make their mining business profitable again, according to blockchain news media Odaily.

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This is a large-scale deployment of mining machines. Bitmain rushed to put 100,000 units of mining equipment in a Sichuan-based mining farm led by Micree Zhan Ketuan, the company’s co-founder and co-CEO, specifically for mining bitcoin. If these mining rigs run at a full load, their hashrate can reach reach 1.33 EH/S, which accounts for 3% of the total network hash power.

The migration of Chinese miners into SiChuan a few months before the wet season (May through October) has become a regular occurrence over the last several years. They hope to take advantage of cheap hydroelectricity— as low as 0.2 yuan( about $0.03) kilowatt hour (kWh)—that is being generated in large amounts by the region’s rainy season.

A source familiar with Bitmain’s mining business told Odaily that the company previously had to bear a relatively high costs of electricity in domestic mining farms, but it recently found a way to get cheap electricity in Sichuan. The new mining farm powered by hydropower is expected to start operating in May.

The mining farm will deploy Bitmain’s self-owned mining rigs, including the Antminer S11, the Antminer S15 and T15.

Noteworthily, Micree Zhan seems to replace Jihan Wu, co-founder of Bitmain, to be in charge of the company’s cryptocurrency mining unit.

The newly-created mining farm is run by a Hainan-registered company called  Hainan Continental Ark Data Technology Co., Ltd. in which Micree Zhan serves as the executive since January 29, 2019, and Fujian Chuangke Technology Co., Ltd. , a wholly-owned subsidiary of Bitmain holds 40% of the company’s shares, according to Chinese enterprise intelligence platform Qichacha.com.

The mining farm is probably a latest example of Bitmain’s “ Joint Mining” strategy which was put forward last December. The strategy refers to a partnership in which Bitmain provides its mining rigs, and the cooperative firm provides electricity and mining space, in an effort to help Bitmain retrieve their funds by running the huge inventories of rigs amid the tough crypto winter.

On March 4, when Odaily reached out to Bitmain for comment, the company responded that “ it is just a general business cooperation between companies, and please refer to the public business records.” 

“Bitmain was a bit unprofessional in running bitcoin mining farms as they failed to find cheap electricity, did poorly in operation and maintenance and had a bunch of superfluous staff”, said a mining farm owner Lu Yuan, who added that the mining business is now separated from Bitmain and is managed by Micree Zhan.

TechNode’s report on February 26 also suggested that Jihan Wu would pivot away from the company’s crypto mining unit, and start a new company that will focus on Bitcoin Cash and decentralized finance.

Numerous reports detail the Beijing-based cryptocurrency mining hardware manufacturer has cut part of its operation, conducted staffing adjustment and even considered a replacement of its co-CEOs amid the market downturn, and it is unclear whether the large-scale deployment of mining rigs in Sichuan will help Bitmain make a turnaround.

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