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Why has China given up on crypto mining? This is a question many people ask, but the answer is not as expected. It turns out that the incident may not be about cryptocurrencies, as some analysts suspected.
Here are the answers
A statement released by China's National Development and Reform Commission on November 16 made it clear why the country is so vehemently against crypto mining and how hard it will work to find its own path.
First of all, it is a translation of the document that called cryptocurrency mining “extremely harmful”. He then drew attention to the energy consumption and carbon emissions of crypto mining. Promising that action will be taken at all levels of society, the statement made the following statements:
For units enforcing residential electricity prices, if they find they are involved in cryptocurrency “mining” activities, they will be fined and tougher action will be taken as they continue to “mine” cryptocurrency.
China's stance confirms what the likes of crypto analyst Raoul Pal have said in the past – China has nothing to gain with Bitcoin. Instead, the country focuses on meeting various environmental goals. The Commission's statement continues as follows:
Improving cryptocurrency “mining” activities is essential in order to promote the optimization of my country’s industrial structure, promote energy savings and emissions reduction, and achieve the carbon peak and carbon neutrality target according to the schedule.”
China has put itself in a carbon reduction program and invited developed countries to it. However, President Xi Jinping still did not attend the UN's COP26 climate conference, which led to a disappointment.
But there are also internal pressures. Known for its fluctuating electricity prices and the risk of winter blackouts, China is openly trying to control how its electricity supplies are used. All in all, the regime seems to view crypto mining as harmful waste.
Is it as dangerous as it seems?
While Chinese authorities focused heavily on carbon emissions, a significant portion of crypto miners' operations were located in regions with abundant renewable energy sources. For example, Xinjiang, once a major Bitcoin mining centre, has noted problems due to excessive power supply. Moreover, the northwestern province is rich not only in coal but also in wind and solar power bases.
