China's Inner Mongolia, once a hotbed of bitcoin mining, is now planning to ban all cryptocurrency mining farms and has asked them to shut.
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- Bitcoin mining is still huge in China despite new ban in Inner Mongolia
- Bitcoin Mining Is Big in China. Why Investors Should Worry.
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- Bitcoin Mining in Xinjiang, China Could Be a Red Flag for Regulators | Barron's
Electricity is the most important thing for cryptocurrency miners and the recent price rise and supply interruption in China forced mining companies to consider other locations.
Bitcoin mining is still huge in China despite new ban in Inner Mongolia
A significant jump in power production due to extreme weather conditions in countries like Norway and Sweden resulted in cheap electricity prices. In , the Chinese government announced a nationwide crackdown against Initial Coin Offerings ICOs and completely banned cryptocurrency trading. However, China remained silent against crypto mining due to the reason that Chinese miners were bringing billions of dollars in Bitcoin and Ethereum mining revenues.
The miners receive bitcoin as a reward and that is the incentive. But because the computers are high-powered, they consume a lot of energy.
Bitcoin mining consumes an estimated In comparison, the United States accounts for 7. Inner Mongolia, located in northern China, failed to meet central government assessment targets regarding energy use in and was scolded by Beijing.
Bitcoin Mining Is Big in China. Why Investors Should Worry.
In response, the region's development and reform commission laid out plans to reduce energy consumption. Part of those plans involve shutting down existing cryptocurrency mining projects by April and not approving any new ones.
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In comparison, the bitcoin computing power generated by all of the United States was only 5. But starting in May, Inner Mongolia will not be an option for cryptocurrency miners anymore.
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In China, draft plans put forth by the government typically serve as notice or warning. Draft plans are then usually later carried out in actions. Separately, cryptocurrency farms in Inner Mongolia have also already begun transferring their mining rigs to set up farms in other locations, such as the Sichuan province, according to local media.
There was a time when coal-burning electricity in Inner Mongolia was subsidized by the regional government. In the United Nations general assembly, President Xi Jinping pledged that China would halt the rise in its carbon emissions by , and achieve carbon neutrality in The plan is revised every five years, and the latest version is for to See related article: Non-crypto firms in China jump into bitcoin mining to lift fortunes.
In terms of helping China meet its goals of reducing carbon emissions, Inner Mongolia has not had a good track record. Many industry watchers believe the determination of Inner Mongolia to close down its mining industry was not only to please but may also reflect pressures from authorities higher than the provincial government.
Bitcoin Mining in Xinjiang, China Could Be a Red Flag for Regulators | Barron's
With the end of April deadline now ticking, what could the mining farms in Inner Mongolia do? But hydropower is also energy that gets wasted if not used — especially during the rainy season.
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One disadvantage of hydropower is the volatility of electricity prices, which can fluctuate depending on changes in weather. Though hydroelectricity is abundant and cheap during the rainy season, prices can go up if there is power scarcity during dry spells. Sometimes, the rainfall that produces hydropower can be too much.