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- Cryptocurrency Mining highly energy-intensive
- Cheap electricity prompts miners to move to rural China
- Bitcoin already facing heat in Xinjiang
According to a report from Reuters, authorities in Beijing have started checks on cryptocurrency mining data centers to assess the energy consumption and the impact on the grid and electric infrastructure. Earlier reports were brushed off as rumors, but Chinese state media has confirmed the news.
Cryptocurrency mining-An energy-gobbling process
Cryptocurrency mining requires machines of gigantic computing capabilities, and the devices are energy-gobbling beasts. Reuters reported that the Beijing Municipal Bureau of Economic and Information Technology ordered checks on the City’s Data Centers. It must be noted that cheap labor and electricity have led most data mining processes to be shifted to rural China. However, the electricity is produced by coal-based power plants, further increasing the carbon footprint.
Authorities have already sent notes to the Three Biggest Telecom Operators. In a notice, the police have asked if these companies are involved in bitcoin (BTC) and other cryptocurrency mining businesses. The process started on Tuesday, and it was later confirmed by state media Pengpai.
Was China’s quest for energy efficiency the Reasons Behind the Checks?
Earlier, authorities had shut down digital currency mining projects in the Chinese region of Inner Mongolia. China’s avowed neutral carbon stance could be a reason for such a move, as per Reuters, who quoted anonymous sources.
The measure could worry Bitcoin miners, and already there is a recent hash rate drop in the province of Xinjiang. People who are using leveraging electricity in Sichuan may see an electrical cost increase. According to a local columnist, already electricity powered by carbon materials in Sichuan has increased by 150%, and there is an added urgency for renewable hydropower.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
