China is the biggest Bitcoin mining hub globally. It accounts for more than 70% of the entire Bitcoin hash rate and has a very strong role in the growth of Bitcoin. But recently, China has been cracking down on Bitcoin as it has been affecting its zero carbon footprint goal severely. In the last month, they have banned BTC again and are now going to investigate BTC mining companies on energy usage. Regulators in China have said that they will gather information regarding power usage from local power companies.
Bitcoin mining in China!
Bitcoin mining in China is really important because a drop in hash rate can lead to price drops too. A few weeks back we saw a sudden price drop in Bitcoin when there was a power failure at a mining-firm in Shanghai. So, if China investigates mining companies and makes it illegal to mine in the country then things will become difficult. It is also the reason many major companies are already moving out to other places like North America and Asia.
Reports have also come that different provinces in China are planning to take action against crypto mining. On June 2nd there will be a seminar in Sichuan that will discuss more on Bitcoin mining. Analysts suggest that the energy consumption in China for Bitcoin mining will overtake the power consumotion of Italy and Sauid Arabia combined in 2016. This is also the reason why Tesla has stepped back from accepting Bitcoin as a payment method considering its primary goal is to promote green vehicles.
The energy usage of BTC mining
BTC mining is a very energy-intensive process. The idea behind is that it is based on a proof of work system where miners are actually solving complex mathematical equations that help in transaction processing. And the miners are rewarded for their services. Since, the processes are complex, very powerful PC components are required for the same and a lot of electricty is required too.
This is why environemntalist call Bitcoin mining a danger to our goal of a greener future. This can be solved by using renewable energy sources for mining. But China is one of the countries where mostly electricity generated from coal is used for BTC mining. This is why the promise or their goal of achieving a zero carbon footprint by 2030 won’t be possible.
What are your thoughts on the energy usage in Bitcoin mining? And what kind of effect will you think China’s ban will have on it? let us know in the comments below. Also, if you found our content informative do like and share it with your friends.