China’s Inner Mongolia is getting rid of new cryptocurrency mining projects in the region and pull the plug on existing activity by April in an attempt to reduce electricity consumption.
Bitcoin functions on a decentralized network, and that means it is autonomous and controlled by a single entity like a central bank.
Transactions, which are recorded on an unrestricted registry called the blockchain — and run on purpose-built machines to solve complex mathematical puzzles — require validation by miners, and that alone eats up huge power.
Inner Mongolia’s cheap energy
Inner Mongolia, a favorite spot among the crypto industry because of its affordable electricity rates, also outlawed new virtual coin projects, based on a draft document posted on the Inner Mongolia Development and Reform Commission’s website on Feb. 25.
According to Bloomberg, the objective of the blueprint is to cut the increase in electricity requirements to around 1.9% this year.
The Chinese autonomous region accounts for nearly 10% of the world’s bitcoin (BTC) mining hash rate, Coindesk reported, citing data from the Cambridge Centre for Alternative Finance.
Clamping down on excessive power consumption
For the current year, Inner Mongolia aims to slash emissions per unit of gross domestic product (GDP) by 3%, after China’s National Development and Reform Commission previously criticized authorities in the region for failing to regulate power consumption in 2019.
Crypto mining operations consume nearly 130 terawatt-hour per year of energy. To put that in perspective, that’s more than what Argentina and Ukraine consume in one year — according to figures by the Cambridge Bitcoin Electricity Consumption Index, a project of the University of Cambridge.
China — the second biggest economy in the globe — accounts for almost 70% of all the world’s bitcoin mining. In comparison, the U.S. accounts for only 7% of global bitcoin mining.
Image courtesy of 99Bitcoins/YouTube
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