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bitcoin

China takes a detrimental stance on Bitcoin mining

The Inner Mongolia Development and Reform Commission released a government draft that seriously affects Bitcoin and cryptocurrency mining. It states that all these projects must be closed in the region by the end of April.

The policy comes after the National Development and Reform Commission (NDRC), China’s top economic planner. NDRC said that Inner Mongolia is the only province that has failed to limit energy waste in 2019. The high energy consumption of Bitcoin could be the primary driver of this decision.

Ongoing efforts by the Chinese authorities aim to reduce energy consumption to almost 1.9% by 2021.

Beijing’s carbon emission pledge vs. Bitcoin.

The draft plan also says the region is currently looking to reduce emissions per unit of gross domestic product by 3% this year.  Approximately around five million tons of coal control incremental growth in energy consumption. This could be a real-time signal of the environmental concerns surrounding Bitcoin.

As Chinese crypto mining news provider Wu Blockchain has tweeted, the cessation of the power-hungry mining practice is also part of China’s commitment to the world’s carbon emissions target by 2020.

The journalist added that Inner Mongolia has always had more restrictions on the mining of cryptocurrencies. Meanwhile, the other three central mining provinces, Xinjiang, Sichuan, and Yunnan, have not taken action.

How long is China going to restrict BTC mining?

The mining industry hotly debates the announcement. The Chinese government has been putting its pressure on this sector for years, citing concerns about energy waste, speculative bubbles, and fraud.

Moreover, Inner Mongolia has cheap energy. Before the ban was introduced, the region accounted for more than 8% of the global mining computing power of Bitcoin (BTC), according to the Bitcoin Electricity Consumption Index.

There is a fear that China will completely abolish cryptocurrency mining. Since 2017, Beijing has banned initial coin offerings and hampered virtual currency trading within the country. Therefore, many mining fields, such as Bitmain Technologies Ltd, moved abroad, forcing most of China’s mining to decline by 25%.

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