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Bitcoin Mining Triggered a Massive Power Outage in this Chinese City, Causing a 500,000 Yuan Loss

Chinese enthusiasm for bitcoin mining may be beyond your imagination despite Chinese authorities’ escalating clampdown on bitcoin-related activities.

A residential communnity in Kunming, the capital of China’s Yunnan Province, suffered a massive power outage on January 13, according to a local media. A power cut is not uncommon in this area, but the reason for this blackout is surprising:bitcoin mining.

Yunnan Province is home to an increasing number of bitcoin miners due to its abundance of hydropower, perfect for the power-guzzling bitcoin mining process. Official data shows that residential electricity costs in Kunming is around 0.44yuan(nearly 6 cents) per kilowatt hour.Quite cheap for bitcoin miners.


Several persons rent a room in this residential community for generating bitcoins.It was found that 12 mining machines, connected to only a computer, kept running unceasingly. And the overload on power consumption brought by bitcoin mining destroyed over 400-meter long cable and led to water outage and power cut for the whole building of more than 30 households. The accident caused an economic loss of nearly 500,000 yuan.

Residential property management staff said a typical household used 200 kWh of electricity a month, while the apartment which was inundated with bitcoin mining machines consumed 10,000kWh of electricity a month.And residential power supply could not satisfy such  astonishing electricity consumption of bitcoin mining process.


Worse still, these miners even use their own high-powered air-break switch to avoid tripping.

“We have contacted the owner of that apartment for further details, but the homeowner responded that his tenants’ rental was legal , so he was reluctant to interfere in renters’ doings in the room.” Property service center staff said.

But renters in question denied that they had used bitcoin mining machines. Then the property management center will take appropriate measures against such large power consumption conducts.

Cheaper energy and relatively loose regulation in remote areas have been boons for Chinese miners of Bitcoin, and China’s bitcoin output ranks the first in the world and accounts for 80% of the total share. However, regulators in this country have determined to shutter bitcoin mines.

A multi-agency task force has ordered local governments to rationally guide enterprises to orderly exsit the bitcoin mining business in early January citing concerns of excessive electricity consumption and increasing financial risks. Galvanized by renewed crackdown efforts, big some of biggest Chinese bitcoin miners are transferring operations abroad,with Canada among their popular options. With living space narrowing down, small-scale bitcoin miners choose to sell out their equipment and quit the industry.

Sure, we could not rule out the possibility that some bitcoin enthusiasts mine bitcoins at home for fun as well as huge profits in secrete.

“Bitcoin Mining is certainly profitable, but small-scale miners may retreat from the space gradually in China.” A veteran bitcoin minder said.


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