China’s crypto mining activities could be more tightly monitored in the future, with the government reportedly concerned about the energy consumption of Bitcoin mining in particular.
Beijing sent an “emergency message” on April 27 to conduct checks on data centers involved in Bitcoin and other cryptocurrency mining activities, which has reportedly been met with some panic in China.
However, Chinese columnist Colin Wu of Wu Blockchain on Twitter was quick to downplay fears of how this could affect Chinese Bitcoin miners in the short term. noticing Which:
“This caused some panic in China. However, the Chinese government said it was only conducting an investigation. Data centers are difficult to use for Bitcoin mining and mainly used for ETH Filecoin. ”
According to Chinese state media PengPai (accessible via translation), the “emergency notification” was routine work for the Beijing Municipal Bureau of Economy and Information Technology as it aims to provide a clearer picture of the energy consumption of Beijing’s mining operations. -based data centers.
It has yet to be revealed whether the controls will be carried out on a national scale, or what the future consequences could be. However, according to PengPai, Yu Jianing, the rotating chairman of the China Communications Industry Association’s Blockchain Committee, it is a sign of things to come. He believes that “against the backdrop of carbon neutrality, future blockchain mining will indeed be tougher.”
This idea holds when we consider Inner Mongolia as a reference – which will no longer be a mining center. Crypto miners have been given until the end of April to shut down their operations after China recently banned crypto mining in the area to meet its new carbon reduction targets.
China’s 14th “Five Year Plan” outlines a series of targets, including an 18% reduction target for “CO2 intensity” and a 13.5% reduction target for “energy intensity” from 2021 to 2025.
Beijing is not known as a crypto mining hub because electricity prices are higher than other regions, which could mean other hubs such as Xinjiang and Sichuan are targeted in the future.
According to data from the Cambridge Bitcoin Energy Consumption Index, or CBECI, Xinjiang accounted for 35% of the Chinese hash power in Bitcoin and about 23% of the global hash rate in April.
Tighter mining conditions could have global effects, with some believing Bitcoin’s sharp crash to $ 50,000 earlier this month was due in part to the hashrate decline in Xinjiang due to power outages around April 17.
Popular crypto Analyst Willy Woo speculated that a “more knowledgeable whale in China” was sold before mining pools were temporarily closed, citing a transfer of 9,000 Bitcoins to Binance on April 16.
The power outage in Xinjiang (which powers a significant portion of the BTC mining network) was known before the BTC price crash. Here’s local news on April 15th. Https://t.co/dGS7GRPj2y
– Willy Woo (@woonomic) April 18, 2021