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Sichuan Rainy Season to Give Bitcoin Hash Rate a Much Needed Jolt

Sichuan Rainy Season to Give Bitcoin Hash Rate a Much Needed Jolt

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4 years ago

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The wet season in Sichuan normally leads to a spike in Bitcoin’s hash rate. Will the same happen this year?

The post-halving reality of Bitcoin’s network may soon change shape, some industry insiders argue. The reason is quite simple, and, surprisingly, it has nothing to do with crypto itself: The wet season has arrived in Sichuan, a southwest China province known as one of the hottest spots for Bitcoin (BTC) mining. 

The rain in Sichuan is a good sign for all local farmers, Bitcoin miners included. The abundance of water leads to a hydropower supply glut, which, in turn, makes electricity prices — miners’ main burden — decrease. As a result, mining becomes increasingly profitable, which can lead to an increase in the overall hash rate. But is it possible for a single Chinese province to drive up the entire Bitcoin network amid slashed rewards?

The go-to place for mining

According to the latest data from the Cambridge University’s Centre for Alternative Finance’s Bitcoin Mining Map, Sichuan accounts for 9.66% of the total BTC hash rate. It is worth noting that the southwest province is not even currently the main mining spot in China, trailing Xinjiang, the desert region which represents as much as 35.76% of the global Bitcoin hash rate. 

However, the distribution of hash power within China changes every year between May and October when the wet season begins in Sichuan. Local players then begin to migrate en masse from Xinjiang, Inner Mongolia to Sichuan and Yunnan to take advantage of the lower electricity rate. Leo Zhang, the founder of Anicca research, told Cointelegraph:

“Over the years, the mining industry started to organize itself around this schedule. Manufacturers do their product announcements in May. Facilities offer their special deals right before the rainy season begins.”

It all comes down to Sichuan’s intensive hydroelectricity sector. In 2019, the province reportedly produced 78.2 gigawatts and exported 104 billion kilowatt-hours, which constitutes around 30% of its total output, to other domestic regions. According to the Chinese mainstream press, the ample hydropower energy during the rainy season, as well as the cool climate in its mountainous areas, has made Sichuan “an ideal destination for miners.” 

Delayed rainy season and post-halving issues

This year’s wet season in Sichuan arrived later than usual, as most of its areas entered the rainy season only around May 25. The delay has reportedly affected the local mining sector. According to a local crypto news outlet, some Bitcoin mining farms in Sichuan switched off earlier this month against the backdrop of electricity shortages. 

The report cited a government notice issued on May 18, which stated that the electricity load within the region has increased by 22% since the start of May, while water flow in local rivers had decreased by 20%, resulting in a shortfall in hydroelectricity supply. According to the report, an unidentified local miner said that some of the local mines stayed blacked out for over three days, while others were only allowed to mine during the night. 

This year’s rainy season is more complicated than in the past since the halving comes into play as well, Zhang told Cointelegraph. According to him, mining operations in southwest China are still slowly recovering:

“After the halving, as even more machines left the network, the facilities were in desperate need to fill the capacity. So far, the supply of hosting facilities greatly outweighs demand. Many facilities in Sichuan and Yunnan areas are having trouble finding clients. The oversupply of flood season hosting facilities further reduces average electricity prices. Compared to last year’s 0.24–0.26 RMB/kWh all-in cost, this year’s average can be as low as 0.10–0.20 RMB/kWh.”

The impact from the block reward halving will be partially absorbed by the lower cost of power, Zhang went on to add, outlining the current trends among Sichuan Bitcoin miners that many of the facilities have contracts with power plants outlining a minimum level of electricity usage. He added: “In order to attract business, some of them are offering ‘joint-mining’ programs, where the miners pay de minimis monthly cost and split the mining revenue with the facility owner.”

Pankaj Balani, the CEO and a co-founder of crypto derivatives platform Delta Exchange, shared a similar sentiment in an email sent to Cointelegraph, arguing that the wet season can even be dangerous for the local mining sector: “Whilst there are clear efficiency gains to be made regarding electricity costs for miners, complications can also arise, including flooding and the destruction of mining infrastructure.” 

In 2019, the Bitcoin hash rate rose from 48 million to 90 million terahashes per second between May and September, with comparable rate gains experienced in 2018. This time, however, there might be different results according to Balani: “The recent halving plays a role here and it remains to be seen whether the observed rainy-season hash rate increase can be sustained in a low-revenue period such as this.”

Overall, the mining sector in China has been experiencing problems in recent weeks with the combination of COVID-19-related restrictions, slashed revenues and price volatility; for example, Canaan, one of the main China-based mining players, recently reported a $5.8-million Q1 loss and cut the price of mining hardware sold by up to 50%.

Ian Descoteaux, the head of mining at Bitcoin.com, does not think there will be an increase in the hash rate “considering we are not even settled yet after the halving” either, but, in his view, the rainy season will at least help to prevent further drops in Bitcoin’s hash rate. Meanwhile, some experts are much more positive about this year’s wet season. Kristy-Leigh Minehan, a consultant and the former CTO of Genesis Mining told Cointelegraph that she is expecting a surge:

“A large chunk of my clients have been unplugging last generation machines and moving them around, just because it’s still profitable at 0.03 kWh versus recycling the hardware. We’ve also seen a continual hash rate gain of 207% in 2017, 73% in 2018 and 104% in 2019. So, I expect to see a similar growth paradigm in 2020.”

New ASICs are coming

The mining market is currently in the bear phase, and margins “are thinner than ever,” according to Matt D’Souza, the CEO of Blockware Solutions, a mining hardware broker, told Cointelegraph, who added that in order to break that trend, more inefficient miners will have to quit the game, or alternatively, Bitcoin’s price needs to move up. 

The quitters are being replaced by the next generation of mining devices like MicroBT’s M30 series and Bitmain’s Antminer S19 machines. Those units are capable of producing up to 100–120 TH/s, thereby mitigating the increased mining difficulty. Some of them have already been shipped out in limited quantities but have yet to become widespread among miners. Descoteaux told Cointelegraph:

“We will see a significant increase in hash rate when the S19 from Bitmain finally ships during the summer. The S19 is a significant improvement over even the S17. So, while miners are not really deploying more power, the overall efficiency gain of the network will result in greater net hash rate number.” 

According to D’Souza, Chinese miners have been “aggressively” upgrading to the next generation equipment. “It is why they [new devices] are sold out through September.” He also believes that the start of the rainy season will increase the hash rate, but it is nonetheless unlikely to cause a massive spike. 

Many farms had been switching over to newer ASICs months in advance, Minehan confirmed, although the coronavirus, shipping delays and material delays “caused a bit of a backlog.” According to her, “June, April and September will be the next upgrade periods. So, we can expect to see ‘increases’ in the net hash in those months.” She added: “Many of the Chinese miners are old hats — meaning this isn’t their first halving — and they have just been planning deployments accordingly.”

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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3 hours ago

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March 12, 2024

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com. 

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

More Tech Stocks:

Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…

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March 12, 2024

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There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

Credit: IVI

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

 

The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.

 

There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.

 

“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”

 

In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.

 

There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.

 

Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.

 

Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”

 

As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.

 

###

 

About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.

IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.

IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.

 

CONTACT

Aerie Em, Global Communications & Advocacy Manager
+82 2 881 1386 | aerie.em@ivi.int

Journal

The Lancet Global Health

Method of Research

Observational study

Subject of Research

People

Article Title

Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study

Article Publication Date

12-Mar-2024

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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March 12, 2024

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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