Major Chinese Bitcoin Mining Center Shuts Down Its Cryptocurrency Operations-sanewnetworks
GUANGZHOU, China China’s Inner Mongolia plans to ban new cryptocurrency mining projects and close existing activities to reduce energy consumption. Bitcoin is based on a decentralized network, which means that it is not issued by a single person, such as a central bank. Transactions recorded in a public ledger called a blockchain must be verified by miners.
These miners use specially designed computers to solve complex math problems that enable Bitcoin transactions. Miners receive bitcoins as a reward, and this is an incentive. But because computers are powerful, they consume a lot of power.
According to the Cambridge Bitcoin Electricity Consumption Index, a project of the University of Cambridge, Bitcoin mining consumes approximately 128.84 terawatt hours per year more than entire countries such as Ukraine and Argentina.
China accounts for about 65% of all bitcoin mining in the world. Inner Mongolia alone accounts for about 8% due to its cheap energy. By comparison, the United States accounts for 7.2% of the world’s bitcoin mining.
However, not all cryptocurrencies work like bitcoins.
Inner Mongolia, located in northern China, fell short of the central government’s 2019 energy assessment targets and was scolded by Beijing. In response, the region’s Development and Reform Commission has developed plans to reduce energy consumption.
Part of these plans involves the closure of existing projects for the extraction of cryptocurrency by April 2021 and refusal to approve new ones. They also include a revaluation of other energy-intensive industries such as steel and coal.
While the Chinese government has supported the development of the blockchain technology that underlies bitcoin, it has sought to take action against the digital currencies themselves. In 2017, Beijing banned initial coin offerings, a way to issue digital tokens and raise money. The government has also taken tough measures against companies involved in cryptocurrency transactions such as exchanges.
China is also striving to become more environmentally friendly. Last year, President Xi Jinping said the country is aiming to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.