14 DAY TRIAL // Chinese police and representatives from the local electricity company have raided three locations where they found Bitcoin mining entities stealing electricity from the public grid, a serious crime in China, punishable with years and even life in prison.
The raids took place on June 1 in the Chinese town of Ma'anshan, near Shanghai, and authorities seized 74 Bitcoin mining rigs from the three raided locations, according to a post on the Weibo Chinese social network, first spotted by CCN. A rough translation of the post reads:
“ After one month’s work, on June the 1st, while everyone was celebrating national children’s day, a TangXi police team, accompanied by the electricity company, struck fast. Attacked 3 places where bitcoin electricity theft was hiding. The policeman took away 74 mining machines. This operation is a solid move against electricity stealing crimes. ”
This is not the first time a Chinese mining farm is caught stealing electricity from the public grid. Something similar happened last year, when police seized 200 Bitcoin mining units after a report from the public.Bitcoin mining rigs are extremely expensive, with some mining farms (data centers) containing hundreds of such units that cost over a few hundred thousand dollars.
Bitcoin mining is a volatile market...
Despite the serious investments that need to be made to enter the business, the Bitcoin mining sector is one of the most volatile mediums around. In the span of two years, a company controlling the market can go bankrupt or have an insignificant role.
Hardware advancements and quick investments can propel a newly launched startup into the top mining companies.
Most of today's Bitcoin mining sector is currently controlled by Chinese mining farms, with very few Western mining farms making a difference.
... that's about to get even riskier
Tomorrow, on July 10, the Bitcoin protocol is about to go through a well-planed stage where the Bitcoin mining reward will be halved to 12.5 Bitcoin per block.
The process of Bitcoin mining is nothing more than basic recordkeeping for the Bitcoin database, called the blockchain. Mining farms perform mathematical operations that add new records to the blockchain and verify old entries to ensure nothing has been tampered with.
The people who engage in this activity are rewarded with Bitcoin and are called "miners." Initially, this reward was 50 Bitcoin per mined block but was later halved to 25.
Starting tomorrow, Bitcoin mining is about to get even less economically feasible for some Bitcoin mining farms that don't have the most modern equipment.
Below is an infographic courtesy of CoinJournal that explains the consequences of the third Bitcoin halving.
