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Yaan, a city in the Chinese region Sichuan, has recently published a reform on the construction of hydropower consumption to assist developments in the blockchain industry.
By employing the advantages of hydropower resources, the city could become a key player in terms of Bitcoin mining.
China Reform To Support Blockchain Developments
Local organizations in Yaan announced recently the joint venture called the “Implementation Opinions on the Construction of Hydropower Consumption Demonstration Zones to Support the Development of the Blockchain Industry.”
By utilizing the vast water resources in the region and by employing the advantages of hydropower, the new reform aims to “seize major strategic opportunities” for blockchain development.
Should it be implemented, the new initiative could establish Yaan as an “influential national blockchain industry gathering place.” It could also cultivate growth for the whole economy sector in Sichuan, the statement outlined.
According to the announcement, all companies taking advantage of the initiative need to match the complete procedures for construction projects.
Although the statement does not clarify the exact decrease of power prices, people familiar with the matter estimate that with the upcoming raining season, this extra supply could bring it down to 0.20CNY ($0.03).
Effects On Bitcoin Mining?
All of the above might have a serious impact on Bitcoin mining. As per a recent report, China is already the leader on the matter, controlling the majority of Bitcoin’s total hashrate. The predicted power price decrease could expand its position even further.
In this case, such developments could be exactly what the network needs. For starters, the upcoming Bitcoin Halving, scheduled to take place in two weeks, will slash in half the rewards miners receive for their efforts.
And, a study on the topic informed the price of the primary cryptocurrency has to reach approximately $15,000 after the Halving if it’s to remain profitable for miners. Since Bitcoin is trading at about $7,700 at the time of this writing, this means that it has to double its value.
Additionally, the unexpected outbreak of the COVID-19 pandemic hit several large Bitcoin mining facilities. Some of them already had to lay off staff members to cope with the situation.
Ultimately, Bitcoin miners, the backbone of the network, could benefit significantly by massive power price declines. In that case, even if the predicted-by-some BTC price increase does not occur after the Halving, they will be incentivized to continue their work.