The majority of Bitcoin’s mining operations currently take place in China, which has brought on many concerns for investors over the years.
These concerns have come to fruition after the Chinese government announced that cryptocurrency mining may be set for stricter supervision in the future after concerns about the energy consumption of Bitcoin mining in particular.
The Asian superpower issued an “urgent notice” for the relevant authorities to carry out a thorough assessment of the different data processing centers where Bitcoin and other cryptos are mined on 27th April. The result from these assessments left a lot of people in shock.
According to Chinese state media PengPai (accessed via translation), the “emergency notice” was routine work for the Beijing Municipal Bureau of Economy and Information Technology, as it seeks to account for a clearer picture of the energy consumption from the mining operations of Beijing-based data centers.
It has yet to be revealed if the checks will be carried out on a national scale, or what the future ramifications could be. However, according to PengPai, Yu Jianing, the rotating chairman of the Blockchain Committee of the China Communications Industry Association, it’s a sign of things to come. He believes that “under the background of carbon neutrality, the future blockchain mining will indeed have stricter supervision.”
This notion holds up when looking at Inner Mongolia for reference — which will no longer be a mining hub. Crypto miners have been given until the end of April to shut down operations after China recently banned crypto mining in the area in order to meet its new carbon-reduction goals.
Sichuan and Xinjiang To Become The Next Targets
The fourteenth “5-year plan” of the superpower sketches out some goals it aims to achieve. These include an 18% reduction in the emission of carbon dioxide and a total decrease of 13.5% energy intensity by 2025.
The state capital is not famed for its crypto mining activities because it has higher-than-normal electricity costs than other parts of the country. It may imply that places like Sichuan and Xinjiang may become the next targets.
According to information from the CBECI (Cambridge Bitcoin Energy Consumption Index), Xinjiang consumes about thirty-five percent of the BTC hashing power in China as of April. On the global stage, it consumes nothing less than twenty-three percent of the Bitcoin hash rate.
Additional strict mining circumstances may have worldwide effects; The recent sharp decrease in the price of Bitcoin to $47,000 was partly due to a fall in its hash rate in Xinjiang courtesy to an epileptic power supply on 17th April.
Thanks for reading! I’ll keep everyone up to date on any new developments in this story, and if the Chinese government does decide to impose stricter measures, which could negatively impact the Bitcoin network.