In recent days the Chinese region of Sichuan, one of the areas with the highest concentration of bitcoin mining operations as a result of the numerous dams scattered throughout the country, has been hit by a number of flash floods caused by heavy and prolonged rainfall. As a result, landslides have hit some of the valleys in the region, forcing several hydroelectric power stations – and consequently bitcoin miners – to temporarily halt their activities.
The most affected area at the moment is the mountainous area of Aba, where the landslides have affected 17 counties, according to local newspapers. Among these, Wenchuan County seems to be the most affected by extreme phenomena. A report published by China Daily reports that numerous mudflows have caused power outages and telecommunication network disruptions, causing numerous inconveniences and even seven deaths.
Some mining farms located in Wenchuan have been flooded and destroyed, with bitcoin mining ASICs that have been literally swept away by the mud, which is visible in the videos coming directly from the area.
2/2 clip of personnel digging out miners from the mud: pic.twitter.com/QebXEqBjrN
— Poolin (@officialpoolin) August 21, 2019
Minimal impact on bitcoin hashrate for now
Although the area has been affected by numerous blackouts, caused by power plants that had to temporarily shut down production facilities to allow a better flow of water, the bitcoin hashrate has undergone small variations for now, comparable to the classic daily oscillations.
Looking at blockchain.com data, the average hashrate recorded in the last 24 hours has gone from the initial 78 exahash on Monday and Tuesday to the current 74 exahash, while the average value of the last three days remains stable at 74 exahash, per hour.
However, as announced by the energy company Sichuan Minjiang, a company listed on the Shanghai Stock Exchange, three hydroelectric power plants in the area remain idle for now, while a fourth hydroelectric power plant is flooded, which is why it will not be able to return to operation in the short term. In addition, local weather forecasts predict prolonged rainfall over the next few days.
It is therefore not clear at this stage how many bitcoin miners have been affected by the flood and the problems caused by it. The county of Wenchuan is one of the many areas of Sichuan that in recent months has attracted dozens if not hundreds of entrepreneurs, who have built their own mining farms, largely due to the very low prices of hydroelectric power produced in the area.
Most of the mining farms are located in the prefectures of Aba (32,000 square miles), Garze (57,000 square miles) and Liangshang (23,000 square miles), where low housing and energy costs have allowed bitcoin miners to make large profits in recent months. However, given the characteristics of the territory, the flood risk will become a factor not to be overlooked, due to the enormous damage that it can cause.