As concerns for China’s expanding carbon footprint increase, the country is said to be focussing its attention on crypto mining. Crypto mining operations in China may now be subject to much more watchful supervision in the near future, as its government is beginning to worry about the energy consumption related to the mining of bitcoin in particular.
On April 27th this year, Beijing officials issued an emergency notice which detailed that it would be conducting thorough checks on any data hubs which had affiliations with bitcoin and any other crypto mining ventures. This emergency notice was said to have sparked panic throughout the industry in China, which caused Colin Wu – a Chinese columnist who reports on blockchain on Twitter – to take to social media and downplay any concerns regarding short term impact on those involved.
Columnist Colin Wu (@wublockchain on Twitter) stated that:
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 are mainly used for ETH Filecoin.
The emergency notice is now said to have been issued as routine from the Beijing Municipal Bureau of Economy and Information Technology. The Bureau is continuing its efforts to understand the energy consumption taking place as a result of mining processes in data centres based in Beijing. Though there has been no statement made as to whether these checks will go on to be made on a national basis or the consequences of such checks could be, many professionals in the area believe that this is the first step in things to come.
This news is perhaps unsurprising when considering the recent situation in Inner Mongolia, where crypto miners will cease operations as of today after being banned by Chinese regulators to meet the latest carbon-reduction targets. The new goal is a five-year plan outlining ambitious targets, including a 13.5% reduction for the intensity of energy and an 18% drop in CO2 intensity.
Beijing is not necessarily known for being a crypto mining hub due to its high electricity prices, suggesting that other hubs including Sichuan and Xinjiang may be the next targets on government lists.
Bitcoin’s energy inefficient form has set off a backlash amongst those who fear that increase in the cryptocurrency’s adoption also means an increase in its already large carbon footprint. Environmentalists have also expressed concern arguing that we should be working to find less energy-consuming processes to manage the financial world. Other cryptocurrencies have been developed in the hope of offsetting this problem. Over the past year, environmentally efficient altcoins have been gaining ground among investors who are aware of the environmental impact of Bitcoin.