A visual representation of the cryptocurrency Bitcoin.
S3studio | Getty Images
Guangzhou, China — The Inner Mongolia region of China plans to ban new cryptocurrency mining projects and suspend existing activities to reduce energy consumption.
Bitcoin is based on a decentralized network. That is, it is not issued by a single entity like a central bank. Transactions recorded in a public ledger called the blockchain need to be “verified” by the miner.
These miners run dedicated computers to solve complex mathematical puzzles that effectively enable the occurrence of Bitcoin transactions. Miners receive Bitcoin as a reward, which is an incentive.
However, computers are so powerful that they consume a lot of energy.
According to the Cambridge Bitcoin Power Consumption Index, a project at the University of Cambridge, Bitcoin mining consumes an estimated 128.84 terawatt-hours of energy annually. This is more than the whole country such as Ukraine and Argentina.
China accounts for about 65% of the world’s total Bitcoin mining — due to its low energy, Inner Mongolia alone accounts for about 8%. By comparison, the United States accounts for 7.2% of the world’s Bitcoin mining.
However, not all cryptocurrencies work like Bitcoin.
The Inner Mongolia Autonomous Region, located in northern China, was scolded by Beijing in 2019 for failing to meet the central government’s assessment targets for energy use. In response, the Regional Development Reform Commission has planned to reduce energy consumption.
Part of those plans will include shutting down existing cryptocurrency mining projects by April 2021 and not approving new projects. It also includes a reassessment of other energy-intensive industries such as steel and coal.
The Chinese government has boosted the development of the blockchain technology that underlies Bitcoin, but it seems to crack down on the digital currency itself. In 2017, Beijing banned the initial coin offering, a way to raise money by issuing digital tokens. The government is also cracking down on businesses involved in cryptocurrency operations such as exchanges.
China is also pushing for becoming more environmentally friendly. Xi Jinping President last year, the country with the goal the peak of carbon dioxide emissions in 2030, was said to be a carbon neutral target until 2060.
China’s Bitcoin Mining Hub Shut Down Cryptocurrency Project
Source link China’s Bitcoin Mining Hub Shut Down Cryptocurrency Project