Chinese officials are reportedly concerned about the huge power usage by some Bitcoin miners, who are taking advantage of low electricity prices in the country. According to the People’s Bank of China (PBoC), it will collaborate with local governments in order to enforce the regulation, curbing the power usage of some Bitcoin miners in the country.
In a closed-door meeting, the PBoC informed members of Leading Group of Beijing Internet Financial Risk Remediation that the move is meant to reduce the scale of electricity production gradually. It however admitted that it has no power whatsoever to regulate the mining of Bitcoin in the country, but would do so in collaboration with other authorities.
Will the Restrictions Affect the Network?
China is home to some of the biggest Bitcoin miners in the world, but the proposed restrictions might not have a noticeable effect on the network. The PBoC is only concerned on lowering the power usage of some miners by asking local governments to implement the regulations.
The scrutiny of miners by the Chinese authorities follows a crackdown on cryptocurrency that was experienced late last year. The authorities even outlawed ICOs in September, calling local exchanges to abandon virtual currency trading altogether.
The Energy Dilemma of Bitcoin Mining
When Bitcoin was launched in 2009, it could be mined by a few GPUs, which didn’t consume lots of energy. The same can’t be said for mining these days. The custom-built ASIC rigs require a high amount of energy to mine just a fraction of the digital currency.
As miners turn to more powerful hardware to earn Bitcoins through mining, greater amounts of energy are sucked up. A research paper published lately even pointed out that the overall energy consumption from Bitcoin mining in 2017 was greater than the usage of more than 160 countries.
To lower the cost of energy, miners are being set up in countries or regions where electricity is cheap, which explains why China is a favorite among many miners. The energy cost in the country is cheaper than some places in the US and the UK.
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Is the energy consumption of Bitcoin mining posing a challenge to the digital currency? What happens if more countries regulate activity because of the amount of energy it’s consuming? Let’s hear your thoughts.