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Flooding Destroys Chinese Bitcoin Mining Facility

woman standing in flooded street

News from Chinese blockchain company INBlockchain suggests the possibility of a huge mining facility in China being destroyed by floods.

The Chinese province of Sichuan and surrounding areas have been hit by floods recently, with local news agency ECNS reporting heavy rain in Anhui, Jiangsu, Sichuan and Shangdong between Wednesday and Thursday.

Eric Meltzer, an early Bitcoin investor and partner of INBlockchain, shared images on Twitter showing a destroyed building full of ASICS miners.

Some people have connected a decline in Bitcoin hash rate overnight as being a result of the destroyed mining facility. Data shows that the hash rate dropped from 43 million TH/s to 30 million TH/s temporarily – a 30 percent reduction. The drop was sufficient enough to alert analysts, despite volatility in Bitcoin hash rate being commonplace nowadays. The hash rate has since recovered back to 40 million TH/s.

However, it doesn’t seem likely that this flood could really have that much of an effect since the mining pools of, Antpool and ViaBTC control the majority of the hash rate. It has been suggested that the recent heatwave in Eastern Europe could also have had a negative effect on mining by slowing down production of low-profit-margin mining centers.

There hasn’t been a direct confirmation by local authorities on the destruction of a mining facility by flooding but the pictures do appear to be somewhat revealing. Local analysts have also pointed out that such a significant hash rate reduction would indicate that a huge amount of Bitcoin’s computing power would need to have been concentrated on the center.

The news comes amidst the release of a paper by the China Banking Regulatory Commission revealing its plans for regulations regarding initial coin offerings (ICO’s). The papers show a positive attitude towards cryptocurrencies and call on domestic lawmakers to introduce business licenses for the market.

Image From Shutterstock

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