The world’s second-largest economy, China bans crypto mining. The reason for this is the increased power usage of the entire process. Bitcoin is based on a proof of work system, and to mine it, highly powerful CPUs and GPUs are required. And the country has not just announced the ban on mining crypto; it is also going to take steps to make sure the ban is implemented. Reports suggest that the company will ban all projects by the end of April.
Why is China a good country to mine Bitcoins?
Mining requires a proper setup in order to produce decent results. And the cost of mining is the initial investment you make on the setup that you purchase and the cost of electricity. Due to the devices running at their maximum potential, the power consumption is huge, so it’s necessary that while mining BTC, you actually stay in the green, offsetting your cost and making some profit. And since power in China is extremely cheap, it becomes much easier for anyone to set up a mining rig there.
China has over 8% of the world’s entire Bitcoin mining computing power. And this is due to the fact that almost everything related to mining is cheap in the country. Only India has rates cheaper than China, making it even better for crypto mining.
China bans crypto-mining!
There was a surge in power usage in the country due to the mining of crypto. And this growth in rate wasn’t something the officials like. Therefore, the ban on crypto mining was placed, so the energy consumption increase can be restricted to 1.9% in 2021. The Bitcoin market in the country isn’t doing great. Over the years, it has been through many problems, and this is just one example. Back in 2018, Bitcoin was considered fraud and nothing but just a waste of energy. And even though that perception has changed worldwide, in China, it remains the same.
The ban will help China reduce the consumption of power and reach its goal of a 3% reduction. At the same time, the country is also planning on reducing its power consumption growth by a huge margin. And it is not that the boom of crypto in 2020-21 has triggered the authorities for the first time. Back in 2018, they planned on bringing this ban into effect due to the huge power consumption that Bitcoin mining was resulting in. Beijing has already banned all ICOs and stopped the trading of digital currencies in the region. It was once the epicenter of Bitcoin mining and trading, but bans have resulted in many exchanges moving abroad.
What are your thoughts on the fact that China bans crypto mining? And did you know after the news of this ban came out, Bitcoin’s price went up? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.