Due to its inexpensive electricity, China accounts for about 65 % of all bitcoin mining worldwide, with Inner Mongolia responsible for around 8%. The United States, on the other hand, accounts for 7.2 % of global bitcoin mining.
Inner Mongolia, China’s third-largest province, has outlawed cryptocurrency mining and announced its plans to shut down all such ventures, creating concerns that the world’s second-largest economy will take additional measures this year to suppress the power-hungry activity. Trading cryptocurrencies has been outlawed in China since 2019 due to worries that they could jeopardize financial markets, but bitcoin mining is allowed.
In November of last year, the Inner Mongolia Autonomous Region’s Department of Industry and Information Technology launched an investigation into the crypto mining industry, and this move in strategy seems to be a direct result of the findings. As per Supercryptonews, since receiving preferential rates for electricity from Inner Mongolia’s Electric Power Trading Hub, they charged an average of 2.60 cents per kWh. Electricity rates are forecast to increase to 3.847 cents per kWh as a result of the recent adjustments, according to industry analysts.
Breaking: China's Inner Mongolia is demanding that all cryptocurrency mining projects be cleared by the end of April. Due to China's commitment to the world's carbon emission target in 2020, the mining of thermal power in Inner Mongolia and Xinjiang will be greatly affected. pic.twitter.com/iaAR5kWoBY
— Wu Blockchain (@WuBlockchain) March 1, 2021
According to the Cambridge Bitcoin Electricity Consumption Index, a project of the University of Cambridge, bitcoin mining uses an average 128.84 terrawatt-hour of energy per year, which is more than entire countries like Ukraine and Argentina. Chinese officials first suggested steps to restrict crypto-mining in 2018, a computational mechanism that allows for virtual currency transactions but consumes a lot of power, as Inner Mongolia faces mounting pressure to meet its energy-saving targets.
The attempts to restrict all high-energy-consuming industries would inevitably put a damper on bitcoin miners’ increasing success, which has been fuelled by sky-high rates, with the cryptocurrency currently selling as per Coinmarketcap at over US$49,000, up from over US$9,000 a year earlier.
Source: coinmarketcap ( Bitcoin 61 %)
Bitcoin mining necessitates a lot of computational power and a lot of power, so operations are drawn to locations like Inner Mongolia, Sichuan, and Xinjiang because of cheap electricity. Small companies in the steel, ferroalloy, coke, graphite electrode, and coal-fired power industries, as well as Bitcoin miners, have been given a deadline to close by the end of 2022. According to the draft paper, the autonomous zone of northern China would also have control over the size of data centers.
China is also trying to boost its environmental efficiency. Last year, President Xi Jinping announced that China intends to achieve peak carbon dioxide emissions by 2030 and carbon neutrality by 2060. Listed chipmakers include Taiwan Semiconductor Manufacturing Co. and Nvidia Corp., are the main suppliers to crypto miners in China and around the world.
— Fyggex (@fyggexchange) March 1, 2021
Image: S. Hermann & F. Richter and simon
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