Large Bitcoin Mining Centers Remain Unscathed in Recent Sichuan Floods, Jiang Zhuoer Says
“ In reality, last month’s heavy rain in Sichuan province had little impact on the bitcoin mining farms there, and only a few devices were destroyed by the massive flood.” Jiang Zhuoer, founder of bitcoin mining pool BTC.Top, said in an interview with the National Business Daily.
His response quashes the swirling rumor that recent floods in the China’s ‘Bitcoin mining capital’—-the province of Sichuan—- resulted in heavy damage to a major mining center in the area, leading to a loss of “tens of thousands”of mining devices and sudden bitcoin mining ‘hashrate’ dips.
Eric Meltzer, a partner at INBlockchain which is a China-based blockchain-focused fund, shared a photo of a destroyed mining facility showing stacks of crypto miners affected by heavy rain and floods there. Continuous heavy downpour swept Sichuan and four other provinces in China late June, affecting thousands of people and causing heavy economic losses, according to the state-run news outlet Ecns.
But industry experts cast doubt on the floods’ significant effects on the the entire network of bitcoin. Zhuoer said photos circulating on websites showed the most affected was a small-scale mining farm in the region which even constructed its facility over unauthorized space.
“The mining farm did not expect they would have been damaged by a flood when constructing facilities, and so they were caught unprepared when floods stroke this time.” Zhuoer said, “ but from the photograph,only 200 to 300 mining rigs were destroyed .” He believed the loss of these mining rigs has little or no effect on the entire network’s computational power.
The worst-hit mining farm owner cannot be reached for comment .
Heavy rain is currently forecast in Sichuan in the coming days, and is this likely to affect bitcoin mining operation in the area? Zhuoer told the reporter that the torrential rain in summer is “a common thing” for large mining farms and will not affect their operations. He learned that large mining farms were still in normal operation in this natural disaster.
“ But days of torrential rainfall might force some small hydropower stations to close due to floods, then leading to the shutdown of mining machines.” Zhuoer said.
Surprisingly, the bitcoin hash rate—-the amount of computing power used by the network to create new coins—had dropped significantly between June 24 and June 27, which coincides with the Sichuan floods.
Jiang said there was a misunderstanding about the connection between the bitcoin’s hash rate drop and the natural disaster. He asserted that the hashrate chart does not fully present the change in the entire network’s power, “the dip in hashrate this time was really no more than standard variance”.
Leo Weese, president of the Bitcoin Association in Hong Kong, said that while some published charts suggested a 30 per cent drop in the hashrate as a result of he flooding, “in reality these charts are just guesses based on how many blocks have been found in a day”, according to FT.
This event highlights that Chinese miners still dominate the crypto mining space and there is a ‘key man risk’ with Chinese mining for bitcoin.