Only last week, China once again announced that there is cryptocurrency transactions held within its borders will be considered illegal, which further tightens the noose around crypto miners. Although the country called cryptocurrencies a threat to the “social order”, there are immediate benefits from these moves, such as releasing enough energy to power countries such as Finland, Chile, Belgium and the Philippines, Quartz reported.
Since earlier this year, China has been consistent in implementing its policy against the use or “digging” of cryptocurrencies in the country. While there have been reports of China wanting to launch its own digital currency that can be used globally, the recent course of events signals a unique goal – to use electricity wisely.
While Britain is short of gas, China is facing a similar coal problem. The South China Morning Post reports that the country is heavily dependent on coal for its energy needs and has reserves that will do so. lasted only two weeks. As the delayed demand for goods is released before the holiday season in the west, Chinese factories need more electricity at a time when stocks are running low.
The guardian reports that about 20 of China’s 23 provinces are facing power shortages, which have forced factories to reduce working hours, turn on shops by candlelight and collapse mobile networks in some regions. Against this background, the ban on cryptocurrency transactions may seem insignificant, given that they represent only 1.1% of China’s electricity consumption.
However, as a Report on Rystad Energy from July this year details in absolute numbers, this 1.1 percent translates to 86 terawatt-hours (TWh) of electricity, the approximate amount of energy consumed by countries such as Finland or Chile in one year, or 84 of the lowest electricity consuming countries in the world. The world put together will need a year, reports Quartz.
Rystad also states that 63% of China’s energy needs are powered by coal and 65% of all bitcoins mined in 2020 are mined within China. This means that 40 percent of all bitcoins mined are coal-fired. Thus, cryptocurrency mining operations in China are responsible for 57 metric tons (Mt) of carbon emissions. He is committed to becoming with China carbon neutral by 2060, these emissions were better reduced in the embryo and the repression from earlier this year made this clear.
According to estimates of Cambridge Electricity Consumption Index, global electricity consumption fell by half to 60 TWh in June, when China fell sharply with operations. Miners have found “safer havens” and resumed activities that have raised consumption back to 98 TWh, according to Quartz. We just hope they found out some environmental.