EDITOR NOTE: Considering that it takes 120 gigawatts per second and 63 terawatt-hours per year to mine bitcoin, the cryptocurrency may be one of the most costly and energy-inefficient forms of money to “mine.” In terms of carbon emissions, bitcoin’s energy consumption is threatening other mining prospects, such as thermal energy in Mongolia. Hence, China has passed legislation that will virtually make bitcoin mining an “obsolete industry” in certain provinces. This inefficiency in bitcoin mining is impacting other countries as well, and unless miners can find an innovative solution toward improving hash rates, the weight of production may eventually crush the value of the sector, and the cryptocurrency itself, within the next decade. Perhaps this is why China and other nations are focusing on central bank digital currencies (CBDC). The problem with CBDCs, however, is that they reinforce the centralization and control that fiat offers governments--all at the expense of the financial privacy and economic prospects of citizens forced to use money that’s no longer backed by anything of real value. It’s a jump from the frying pan straight into the fire.
A report by Chinese journalist Colin Wu reveals that Mongolia will ban Bitcoin mining. According to information released by Mongolia’s Internal Development and Reform Commission, the Ministry of Industry and Information Technology, among others, has written a draft on energy consumption targets.
The draft is open for public comment until March 3, Wu reported, and calls for bitcoin and cryptocurrency mining projects to “clear up” by the end of April 2021. In addition, if the draft is approved, construction of new projects aimed at mining cryptocurrencies could be “strictly” banned. The ban aims to meet carbon emissions reduction target. Wu reported:
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.
The impact on the Bitcoin mining sector
In 2019, the Chinese government issued a ban on the “obsolete industry” of Bitcoin mining. However, it was ineffective in reducing such activities. According to Wu’s report, the current conditions are different and could be more effective in reducing the ongoing BTC mining.
The Mongolian province has little sympathy for crypto miners; unlike Xinjiang and Sichuan where miners are recognized as a key part of the emerging energy industry and contributors to the local economy. In addition, Mongolia’s Ministry of Inner Industry has already banned the activities of 21 mining companies. Therefore, Wu believes:
This is currently a government draft, but due to Beijing’s carbon emission commitment, cryptocurrency mining will be greatly restricted in China in the next years. This will lead to more mining projects moving out of China.
In the immediate future, miners could be relocated to Sichuan, Yunnan, and other provinces with more miner-friendly policies. The most benefited sites could be those where the power system operates on hydroelectricity. However, the decision appears to already face criticism, Wu said:
As one of the top political tasks in China, carbon neutral will have a direct impact on cryptocurrency mining. The energy consumption of bitcoin mining will shift from thermal power to hydropower, wind power, solar energy and even nuclear power.
In the United States, companies such as Riot, Marathon, and Great American Mining have set out to “bring” the Bitcoin hash rate to the United States. To that end, they have created innovative ways to mine BTC and have made significant investments to improve their Bitcoin mining capabilities. Although China still dominates in this sector, the landscape could change in the next decade.
Certified Organic Natural Gas Fed Bitcoin Mining ✅ pic.twitter.com/qengwRSKCs
— GreatAmericanMining (@GAMdotAI) February 28, 2021
Originally posted on Crypto News Flash