China might be making some serious decisions against the cryptocurrency mining. The autonomous region of China, Inner Mongolia has forbidden cryptocurrency mining. It has also revealed its intention of closing all related projects by next month i.e. April.
This has provoked fear amongst the public that one of the world’s largest economies will take additional steps to eliminate the power-hungry tradition.
According to a draft plan the independent region, which is famous for its cheap power, also forbade new digital coin schemes. The plan was displayed on the website of the Inner Mongolia Development and Reform Commission. The purpose of such bans is to regulate energy consumption. The region wants to limit it to approximately 1.9% within this year.
The autonomous region wants to curb emissions per unit by 3% gross domestic product, this year itself. It further aims at regulating the increased growth of energy usage at approximately 5 million tons of average coal.
Crypto mining consumes a lot of energy and Chinese officials have formerly in 2018 shown disapproval of it. Crypto mining, while making transactions through virtual currencies possible, consumes a considerable amount of power.
With there being a shortage of coal, the energy crisis is a real issue that needs to be addressed before it’s too late.
Inner Mongolia has large coal reserves and being famous for cheap energy, has captivated investment from a lot of power-intensive sectors. According to the Bitcoin Electricity Consumption Index compiled by Cambridge University, the region accounted for 8% of global Bitcoin mining computing energy. While overall China accounts for 65% of Bitcoin’s total.
China has been a hub of crypto mining because of its tempting blend of cheap electricity, native chipmaking industries, and inexpensive labor.
This restriction is bringing back old worries. Since 2017, Beijing has eradicated initial currency offerings. In addition to it, it has even prevented trade in digital currency within its borders. This has forced many exchanges to take place overseas.
Cryptocurrency has long been blamed for the enormous amount of energy consumption. In Abkhazia too Bitcoin miners are accused of the energy shortage. The state has seen almost 625 new crypto farms, that require a lot of energy to run.
With the cryptocurrency gaining acceptance and popularity each day, more and more people have started showing interest in it. Countries like Abkhazia are now facing an energy crisis because of this increased involvement in digital currency. The Abkhazia Government tried to regulate the activity back in 2018 by banning it but failed completely.
While cryptocurrency has promoted the concept of virtual trade and investments, it has done so at some cost. It has cost the energy and power sector, leading to the energy crisis in countries like Abkhazia. Moreover, the energy consumption by crypto mining has also raised some climate concerns, with experts expressing its impact on global warming.