Annual spring rains bring trucks full of computers to hydroelectric dams, where businessmen can tap cheap electricity to mine bitcoins.
The author said Charlie Campbell in report published magazine “Time” ( Time ) US China has about 75% of capacity mining Alphabet in world because chains established technology and electricity cheap very supply, and requires mining encrypted currencies a tremendous amount of computing power, making energy consumption A major burden to the industry. Read also How did Bitcoin become the pioneer of digital currencies? Ethereum.. Learn about the most popular digital currency after Bitcoin Bitcoin price prediction models .. Do they provide accurate forecasts? In light of the fluctuation of Bitcoin, did banks risk entering the cryptocurrency world?
This means that during the summer, when it rains, miners flock to hydroelectric plants in Sichuan, which has ample supply, and local governments often offer power for a low price to attract jobs and boost GDP numbers.
In late May, China’s central people’s government signaled a crackdown on cryptocurrency mining, causing the price of bitcoin to drop by 30% and creating hardships for the entire industry, which has lost more than $1 trillion in value.
Liu He, deputy head of the Central People’s Government, told a group of financial officials that the government will clamp down on Bitcoin mining and trading activities to ensure financial stability, and although individual miners and traders may be able to evade oversight, larger commercial miners are likely to consider centers Alternative mining with less stringent regulatory requirements, analysts say.
suspension of mining operations
In the past weeks, companies involved in cryptocurrency mining have suspended operations in China, crypto exchange Huobi has suspended mining hosting services as well as some trading services, and cryptocurrency miner CashCow said it will stop selling machines to customers. In China, it said in a statement that it would “support all kinds of laws and regulations in the country.”
Meanwhile, CEO of BIT TOP, which accounts for more than 18% of the Bitcoin mining hash rate in China, announced the suspension of its domestic operations, writing in his account on the social networking site Weibo Essential in North America, it’s not worth the regulatory risk.”
The surprise crackdown was largely driven by the inherent speculative nature of cryptocurrencies, as well as the Chinese Communist Party’s intense aversion to risk or anything outside its control.
Complicating matters further, the massive environmental toll of cryptocurrency mining is undermining Chinese President Xi Jinping’s ambitious promise to make China carbon neutral by 2060.
Prior to the campaign, Bitcoin mining in China was expected to generate more than 130 million metric tons of carbon emissions by 2024, according to a study published in the scientific journal Nature Communications. It ranks 29th among the world’s largest energy consumers on the list of countries in terms of energy use above Argentina, which has a population of about 45 million.
Although cryptocurrency mining during the summer months benefits from sustainable energy sources thanks to torrential rains, winters in China are barren, which means that miners have to search for cheap alternative electricity supplies, and solar and wind farms do not produce enough constant supplies to run mining operations around the clock, and as a result miners often turn to the only affordable alternative, coal.
Mining rigs are pushed thousands of kilometers across China to power plants in Inner Mongolia or Xinjiang province, and with the passing of the seasons, what some consider the world’s greenest industry – converting surplus renewable energy into cash – quickly becomes dirtier, especially as it is based on burning Coal to create currency.
The digital currency mining industry achieved a profit of $ 1.7 billion in April, and despite the fact that mining is digital and not physical, it also means that the bitcoin currency mimics some of the properties of gold, which is arguably the most successful medium of exchange in history, which is still a high-value asset. value despite the passage of thousands of years.
Cryptocurrencies may have been invented to circumvent government control. In contrast, China’s regressive culture of regulation has allowed it to dominate the industry, and even with the latest crackdown, Beijing has not supported or allowed financial institutions to trade cryptocurrency, but has turned a blind eye to mining that was already subsidized. from some local governments.
The contrast has become stark, with dozens of tech companies with lavish offices in Shenzhen and Shanghai claiming to be involved in artificial intelligence, big data processing, or using blockchain for commercial purposes, but in reality they make their money mining cryptocurrency in remote dams and power plants. .