- All cryptocurrency miners have been asked by the Qinghai province authorities to stop their business
- Crypto Mining consumes high energy and also pollutes the environment
- A major dip in the price of Bitcoin when China bans Crypto Mining
According to a government document released on Wednesday, China’s Qinghai province has declared a ban on virtual currency mining operations. Qinghai is the latest coal-based crypto mining hub on the verge of eradicating the industry entirely. The announcement follows another crackdown notice issued in Xinjiang against some crypto miners, as well as Inner Mongolia, which had previously imposed restrictions on miners. The document was issued by the provincial government’s Qinghai Industry and Information Technology Department.
Crypto Mining effects on Nature
The local government cited the concerns of the central government about the high-energy and environmental pollution industries, as well as the directive of the State Council to maintain financial stability through the crackdown on crypto mining and trade, as two reasons for eliminating all mining activities in the province.
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Depending on the season, bitcoin miners in China use a combination of coal and hydroelectric power to power their machines. The government, which is attempting to reduce its carbon footprint, has focused on the use of coal in particular.
Bitcoin Miners notice to halt operations are sent to the province of Qinghai
Beijing’s anti-bitcoin crackdown appears to be gaining traction. It began two weeks ago when a few Inner Mongolian accounts reported that the region’s top economic planner had announced new rules prohibiting the operation of bitcoin mining facilities in the region. Inner Mongolia’s bitcoin mining problems turned out to be the first anti-crypto mining enforcement measure.
The Sichuan Energy Regulatory Office planned to hold a meeting on June 2 to discuss the implications of bitcoin mining at the end of May 2021. At the time of writing, no reports of bitcoin mining bans in Sichuan province had surfaced as a result of this report. In May, China’s State Council, one of the country’s highest government bodies, ordered local governments to crack down on crypto mining and trading. For a long time, China’s government has been moving in this direction. In April, Inner Mongolia enacted regulations on energy-consuming businesses, while Sichuan – another mining hotspot – said it might scrap a local energy policy that miners had taken advantage of.
According to regional reports, China’s Qinghai Province issued a notice to bitcoin miners on the same day, instructing them to cease operations immediately. The notice comes from the Qinghai Department of Industry and Information Technology. Businesses will be inspected, existing mining projects must be halted, and no mining companies will be permitted to mine virtual currencies in the province, according to the document.
High Volatility in Bitcoin Price
The crypto market crashed in May as a result of increased scrutiny in China; following news of the Chinese State Council’s new guidelines (along with some bearish tweets from Tesla CEO Elon Musk), Bitcoin’s price plummeted from the high $50,000s to the low $30,000s.Bitcoin’s hash rate (a measure of how much computing power is securing the network) fell over 16 percent earlier this year when a number of coal plants shut down due to accidents in local mines.
According to data from Cambridge University’s Center for Alternative Finance, the majority of the computing power behind the Bitcoin blockchain has historically been centralized in China, but restrictions like these have encouraged some miners to relocate to countries like Kazakhstan.
Bitcoin’s price, which had risen to nearly $4,000 in the previous 24 hours after El Salvador declared the cryptocurrency legal tender, fell slightly as a result of the news.