Cryptocurrency miners are going to have to leave Inner Mongolia. Bloomberg today reported that the autonomous region within the People’s Republic of China recently banned cryptocurrency mining in an effort to reduce its power consumption in 2021.
The Inner Mongolia Development and Reform Commission announced the plan, which has yet to go into effect, on February 25. Bloomberg said the draft plan would ban “new digital coin projects” in addition to the mining of existing cryptocurrencies.
It’s no secret that cryptocurrency mining requires a lot of power—and not just the kind afforded by modern graphics cards, dedicated processors, and gaming laptops. Turning math into money uses plenty of electricity, too, which is the problem here.
A study published by Nature in 2018 estimated that, on an electricity-used-to-dollars-earned basis, cryptocurrency mining required more energy than rare earth mining. A more recent estimate said Bitcoin mining alone uses more power than Argentina.
On the micro level, cryptocurrency mining’s reliance on high amounts of energy means people have to be careful to pick a PSU that can handle the job. On the macro level, however, there are concerns about mining’s contributions to global warming.
Wired specifically called out Inner Mongolia, which reportedly generates most of its electricity from coal, in a 2019 article claiming that cryptocurrency mining’s effect on the environment largely depends on how its energy is supplied. Clean trumps coal.
That doesn’t necessarily mean Inner Mongolia’s crypto-crackdown was entirely motivated by environmentalism. China might also desire to replace existing cryptocurrencies with home-grown digital coins over which it has more oversight.
And as is typical of cryptocurrencies, Bitcoin’s price is at nearly $48,000 after dropping below $44,000 during the past week, down from its high of $58,000 on February 21.