(Yicai Global) Jan. 8 -- There will be more applications for blockchain technology this year, despite China's efforts to spur virtual currencies and their miners out of the country, several industry sources told Yicai Global.

Blockchain, the digital ledger which holds public records of cryptocurrency transactions, is still in its early stages, the sources said. Venture capital firms had no interest in it in 2015, but it has become more popular since last year, with a few big VC firms splashing out on the industry.

"Last year's initial coin offering frenzy blew up some industry bubbles, but tough global regulation should see the industry develop better," said Li Wei, chief executive of Hangzhou-based blockchain firm Hyperchain Technologies Co. There is an abundance of applications for blockchain. Almost all domestic banks, brokerages and insurers began making plans for it last year, he added.

A leading government work group that polices China's internet for financial risks recently issued a circular directing local governments to adopt targeted measures on electricity prices, land, taxation, and environmental protection to actively steer virtual currency mining firms' orderly retreat from the market and report to the group their progress in so doing by Jan. 10, undisclosed inside sources told Yicai Global yesterday.

"It won't be a 'one size fits all'" approach, it will regulate the illegal use of electricity by mining companies and stop offering energy and tax benefits to them, said Rico, a risk-control official at a large bitcoin trading platform.

A loss of power will affect the efficiency of Chinese miners, one unidentified source added, saying the mining market has become saturated around the world. Soaring prices of mining rigs, high electricity costs and the increased difficulty of the process make profitability very tough, but the move to shun miners in China will benefit those overseas, he said.

Acquiring new bitcoin costs between CNY10,000 (USD1,540) and CNY20,000 a piece (worth around CNY99,500), the bulk of which comes from electricity. One mine in Sichuan has nearly 6,000 rigs and consumes CNY7,000 in energy every day, or nearly CNY3 million (USD462,150) a year. Mines gathered in China because it can manufacture rigs cheaply, said Rico, adding that the new regulation could see these machines exported.

"Some miners may move abroad to places like Russia or Iceland because of the new rules," another unidentified source said. Cheap electricity is a must for mining and cool temperatures mean less money is spent on preventing rigs from overheating.