In a major development, the fast-growing cryptocurrency mining operations in the Inner Mongolia region of northern China are likely to face a severe setback with the country’s latest decisions. The regulatory channels have decided to shut-down the working of the existing mining hubs and have restrained the launch of any new mining project. The efforts are being made to control the escalating energy consumption rate caused due to mining clusters.
The official statement released conveyed that the cryptocurrency mining operations likely involve a whopping 128.84 terawatt-hour per year of energy. Interestingly, as Inner Mongolia provides energy resources economically, the region is widely preferred by Bitcoin mining firms. The reports reveal that approximately 8% of the total Bitcoin mining around the globe is executed in Inner Mongolia. The surprising figures of energy consumed by Bitcoin mining are more than the energy used by the countries like Argentina and Ukraine.
As we know that cryptocurrencies are virtual assets that are built and managed on a blockchain portal. The blockchain records and stores the transactions executed by the users. These transactions require validation by miners as they do not involve a third-party guarantee like a central bank or entity. The software required to solve the complex algorithms involved in the verification uses a lot of energy. The mining firms are required to spend a huge amount of investment on these high-powered computers, so they look for regions that can provide energy at an economical rate. There are many such firms and bitcoin mining sites that give the users privilege to mine their very cryptocurrencies at economical rates.
The Inner Mongolian state authorities failed to comply with the central government’s guidelines on energy consumption levels. Therefore, the government decided to shut-down the current mining hubs by April 2021 while without giving any approvals for emerging firms. The Chinese government has been following a skeptical view towards the state of cryptocurrencies. The country plans to adopt a greener economy and is keen to reduce carbon emissions by 2030 and achieve carbon neutrality by 2060. The government’s latest steps towards curbing mining operations are an indication of its dedication to achieving its set goals easily.