Owners of Bitcoin mining facilities in Baoshan, Yunnan Province, China faced an uncertain future today as the state government ordered electricity plants in the city to shut off all power with immediate effect. Any grid station who defy the government and continue to provide power will be deemed illegal.
Attempts to ban Bitcoin
In April 2019 the idea of a nationwide ban on cryptocurrency mining was floated by the CCP in order to address the negative environmental impact Bitcoin mining has on the local community. China’s draft policy never made it to full legislation however in August of this year Bitcoin miners of Inner Mongolia saw their subsidized electricity rates revoked in a further governmental effort to clamp down on their activities.
Bitcoin energy consumption
According to a written testimony presented to the U.S Senate Committee on Energy and Natural Resources in August 2018 the mining of Bitcoin accounts for around 1% of the world’s energy consumption. With each algorithmic computation necessary for mining taking 10 minutes to solve the average cost in power of one Bitcoin is 72,000 giga-watts. Even though the cost of electricity varies from country to country the overall cost in both environmental and monetary value is extremely high.
China hash-rate dominance
As China continues to dominate the global crypto mining industry the government continues to search for ways to curb the industry. Following a decision to ban cryptocurrency exchanges country wide in 2017 many crypto enthusiasts believe a subsequent ban on Bitcoin mining in China would lead to a seismic shift in the structure of the global crypto industry. With China currently responsible for over 65% of the total Bitcoin hash-rate (the measure of power required to mine Bitcoin) a nationwide ban on mining could see massive disruption to the distribution, availability and ultimately price of the world’s leading crypto asset.