China has tightened its already strict bitcoin (BTC) regulations. Over the past couple of weeks, the country that makes up more than half of the Bitcoin computing power has cracked down on miners due to environmental concerns. While Chinese provinces are somewhat free in enforcing the bitcoin mining ban, many regions are indeed telling miners to shut up shop.
According to reports from Reuters, the northwestern province of Qinghai is one of the latest to tell crypto mining farms to close their doors. Also, one district in Xinjiang is cracking down on miners. Xinjiang is known for being the biggest mining hub in China. The impact of these crackdowns can be felt on the market as well. The bitcoin price has tumbled significantly but already shows some signs of recovery.
While many bitcoin miners in China use renewable energy sources such as hydropower, wind, and solar, many also use dirty electricity generated with coal. This caused concern within the Chinese government, which is trying to lower its emissions. The country is also trying to clamp down on bitcoin trading to achieve “financial stability.”
Other Chinese regions enforcing the ban are Inner Mongolia, the third-largest crypto mining hub in China, and Sichuan, the second-biggest mining hub. Some regions act differently, for example, by “cleaning up” the mining sector. Yunnan will ban any direct contracts between miners and electricity plants. This means that the miners in that province will have to use electricity straight from the state grid, which is more expensive and gives the local government more power over miners.
Either way, the implementation of the crypto mining ban in China is moving forward. The effects of this ban can already be seen on the Bitcoin network. The computing power reached an all-time high in mid-May. Since the Chinese government announced the bans, the computing power has dropped by over 25%, likely caused by Chinese miners shutting off their mining rigs.
It is unclear how the situation will evolve. Many Chinese miners are already migrating to other parts of the world to countries such as Kachastan, United States and Canada.. Russia and Europe are also popular destinations for these miners fleeing from the harsh Chinese crypto mining ban.
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