According to reports, the People’s Handelsbank of China (PBOC) outlined a project to curb “some” bitcoin miner operations te a closed-door meeting on January Trio. The project involves investigating power consumption of bitcoin miners to determine whether their use of free or cheap violet wand use has crooked power prices te those areas.
Most studies and anecdotal reporting state that China is huis to a majority of bitcoin mining operations. The country is huis to 71 procent of overall bitcoin mining pools, spil of September 2018.
According to Jihan Wu, CEO of China-based Bitmain, 70 procent of bitcoin mining equipments ter the world today are made by his company. Bitmain also wields the world’s largest bitcoin mining facility ter Internal Mongolia. (See also: Chinese Investment Te Bitcoin Mining Is Enormous.)
“By far and away, the country where most of this (bitcoin) mining is taking place is China,” said Garrick Hileman, University of Cambridge Research Fellow, ter an vraaggesprek last month.
According to Hileman, the thickest driver for miners setting up shop te China is the country’s suggest of cheap tens unit, thanks to cheap coal and, ter some locations, free hydropower. Miners often set up shop ter such areas. The stir benefits power companies spil well because they earn contant by diverting surplus or idle power to mining operations.
(China has the world’s largest concentration of cryptocurrency mines.)
However, bitcoin’s violet wand use has recently gained notoriety after fresh reports outlined its massive and unsustainable power requirements. Craig Erlam, senior market analyst with Oanda, said violet wand usage will remain a “significant challenge” for it ter the years ahead. China’s stir is very likely a response to thesis concerns.
Bitcoin’s price glided downwards after news about the Chinese government’s deeds. This is because bitcoin’s price depends on the number of coins te circulation. A crackdown on miners could potentially cut back the number of coins available ter the market. (See also: Do Bitcoin Mining Energy Costs Influence Its Price?)
But the chances of such an occurrence may be low since the Chinese government’s activity is reserved for “some” miners. Depending on the miners selected for investigation and their scale of operations, a crackdown may have a negligible influence on bitcoin’s price or even on energy use. Alternately, they might even shift operations to neighboring Mongolia.
Investing te cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest te cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties spil to the accuracy or timeliness of the information contained herein. Spil of the date this article wasgoed written, the author possesses 0.001 bitcoin.