China chooses Sichuan as bitcoin mining capital

Sichuan, a province of China, is transforming into a global Bitcoin mining capital primarily due to its cheap electricity, low population density and cold climate.

China’s southwestern provinces, such as Sichuan, are seeing an exponential growth of Bitcoin mining facilities and centers as companies continue to search for mountainous regions with high altitude to cool down mining equipment without allocating additional resources.

Rows of mining equipment operated continuously over time leads to mounting operational costs. Apart from the space, the cost includes electricity charges for running the mining hardware and the air conditioning units to maintain optimal conditions within the mining centers. If the costs are too high, it will eat into the margins of the Bitcoin miners, rendering the whole operation ineffective.

Cryptocurrency miners have increasingly started to explore alternative energy sources and cold climates to cut down on the energy costs. 

One of the major reasons behind the rapid growth of mining companies within the Sichuan province is the decreasing electricity costs, as mentioned by various respected Bitcoin experts including Andreas Antonopoulos and Chandler Guo in the past.
According to chinese media, an example is Tianjia, a network company in Mabiana Yi autonomous county within Sichuan. The company is said to own over 1500 units of Bitcoin miners that run round the clock to churn out the most popular digital currency.

The mining centers are keeping their overhead costs low by creating their setup within hydroelectric power stations, which are abundant in the region. These installations are provided with adequate security to ensure the safety and uninterrupted operation of the mining equipment.

Another major issue which miners and mining facilities struggle to deal with is noise resulting from high intensity and performance mining equipment. A manager of Mabian Tianjia Network Technology, a Chinese mining company, stated that mining facilities are migrating to remote regions with a limited number of residents so that they won’t have to deal with noise complaints.

"This room has 1,500 Bitcoin mining machines, our largest in this location, and can produce nearly 10 Bitcoins every day," said a manager at Tianjia.

However, the profitability of Bitcoin mining in the Sichuan region is said to be seasonal as the energy costs rise during summer. At the same time, during the rainy season, these mining centers risk flooding due to increased water levels.