China intensifies its crackdown on Bitcoin mining

China’s largest Bitcoin-producing province has stepped up its crackdown on cryptocurrency mining, which is the latest sign of how global authorities are strengthening their stance on the fast-growing digital asset market.

The country’s Bitcoin mining business, which is the power-consuming process of solving the computational puzzle of creating new virtual currency units, has been shrinking since May the government confirmed the prohibition of cryptocurrency transactions and warned of the risks of using them for payment. Bitcoin Price plummet After the announcement, the current transaction price is approximately US$30,000 lower than the peak of nearly US$65,000 in April.

China’s latest intervention has put further pressure on what was once one of the most active digital currency trading and mining markets in the world. At the same time, many governments are reviewing the environmental impact of the industry and determining the type of financial regulation that should be applied to cryptocurrencies.

Earlier this month, global regulators called on digital currencies to bear the most stringent Bank capital rules For any asset, the Basel Committee on Banking Supervision warned that the increasing use of encrypted assets “may cause financial stability problems.”

After officials from all the mining business centers in China followed closely, this week wave of despair attacked China’s cryptocurrency mining community Inner Mongolia And issued further measures against Bitcoin creators. Mining was banned in the northern region in May, and a telephone hotline was opened to report suspicious operations.

According to Chinese media reports on Friday, Sichuan is a province rich in hydropower resources in southwest China. After a series of meetings of the Energy Bureau of the local Development and Reform Commission, the 26 largest mines in the region have been ordered to cease operations because of ongoing investigations.

The investigation will continue until June 25, and many Bitcoin miners see it as a warning that it is time to pack up and relocate outside of China.

The video of an employee of a large mine shutting down the computer server seems to capture a sense of end, and is widely shared by Chinese cryptocurrency enthusiasts online.

Because of the extensive network of dams that provide abundant renewable energy, Sichuan has been regarded as the place of last resort to drive mining operations out of provinces that rely on coal-fired power plants for power generation.

The governments of Xinjiang, Yunnan and Qinghai, the major cryptocurrency mining areas, also announced plans to shut down mining operations this month.

Since China’s goal is to reach the peak of greenhouse gas emissions by 2030 and achieve “Carbon neutral“By 2060.

Analysts often point out that the computers required to run Bitcoin production are Bad for the environmentThe Bitcoin Power Consumption Index of the University of Cambridge shows that Bitcoin mining consumes 133.68 terawatt-hours of electricity each year, which is more than the consumption in Sweden last year.

However, crypto mining advocates say that at least part of the energy used comes from clean energy, some of which may not be developed because they are located outside the typical energy network.

Despite measures taken in 2017 and 2019 to curb Bitcoin transactions and investment, according to estimates before the crackdown, China is still the world’s major Bitcoin creation center, accounting for 75% of the global mining industry.

Guan Dabo, an economist at Beijing’s Tsinghua University and author of a study that estimates the contribution of Bitcoin mining to China’s carbon emissions, said that redistributing miners to places with cleaner electricity supplies is only a temporary compromise.

“[Bitcoin mining] There is no benefit to the country’s economic development and social development. “He said. “On the other hand, it consumes a lot of electricity that can be used for other purposes, especially in the provinces. Power shortage. ”

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