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China cracks down on illegal crypto miners

China cracks down on illegal crypto miners
By We Play Coins
Added on Dec 24, 2019

China cracks down on illegal crypto miners according to a report by CCTV. Chinese police have confiscated thousands of crypto mining machines that seem to be taking more than 40% of the average household.

Chinese authorities have seized nearly 7,000 crypto mining machines, illegally consuming electric power, local news outlet CCTV reported on Dec. 22.

The cryptocurrency mining confiscation came as part of an inspection of more than 70,000 households, 3,061 merchants, 1,470 communities, as well as factories, mines, courtyards and villages in the Kaiping District of Tangshan city. The inspection was carried out by Tangshan police in collaboration with State Electric Power Department and other authorities looking to inspect suspicious electricity use.

During the investigation, which initially started in April last year, the authorities seized 6,890 ASIC miners and 52 high-power transformers. According to the police, crypto miners were stealing electricity from a nearby village. The police also said that Bitcoin (BTC) mining machines were operating 24 hours a day, consuming electricity at rates up to 40 times those of a regular family.

Crackdown on crypto mining

China, whose BTC miners are currently responsible for as much as 66% of global hash rate, has been actively fighting illicit use of energy by crypto miners. In mid-November, regulators in China’s Inner Mongolia Autonomous Region tightened their grip on crypto mining companies, as they intend to dispatch inspection units to assure the “clean-up and rectification of crypto token mining companies” in the region.

Some other jurisdictions like Abkhazia have also intensified work on the identification of crypto mining farms. The government brought to notice earlier in December that the significantly increased loads on electric networks were aggravated by the emergence of an ever-growing number of illegal crypto mining farms connected to a local power utility.

In November, Iranian authorities offered a bounty to anyone who exposes unauthorized mining operations in the country. People who expose cryptocurrency mining operations that are illicitly using subsidized electricity will purportedly receive up to 20% of the recovered damages.

What are ASIC machines?

An application-specific integrated circuit (abbreviated as ASIC) is an integrated circuit (IC) customized for a particular use, rather than intended for general-purpose use. In Bitcoin mining hardware, ASICs were the next step of development after CPUs, GPUs and FPGAs. Capable of easily outperforming the aforementioned platforms for Bitcoin mining in both speed and efficiency, all Bitcoin mining hardware that is practical in use will make use of one or more Bitcoin (SHA256d) ASICs.

Note that Bitcoin ASIC chips generally can only be used for Bitcoin mining. While there are rare exceptions – for example chips that mine both Bitcoin and scrypt – this is often because the chip package effectively has two ASICs: one for Bitcoin and one for scrypt.

The ASIC chip of choice determines, in large part, the cost and efficiency of a given miner, as ASIC development and manufacture are very expensive processes, and the ASIC chips themselves are often the components that require the most power on a Bitcoin miner.

While there are many Bitcoin mining hardware manufacturers, some of these should be seen as systems integrators – using the ASIC chips manufactured by other parties, and combining them with other electronic components on a board to form the Bitcoin mining hardware.