China to BTC Miners: Slow Your Operations a Bit!

by
Nick Marinoff
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Darn it! China was doing so well, too. Following all the hype and hoopla about China finally saying “yes” to bitcoin mining, it seems the country doesn’t have enough electricity to provide for all the new operations.

China Says, “Slow Things Down!”

China recently announced that all cryptocurrency mining activity would be legal within its borders. This was a big deal considering the country’s strained relationship with bitcoin and its altcoin cousins. For one thing, regulators were long debating over whether the extraction of new coins should be made illegal considering doing so allegedly caused environmental damage.

While this never came to fruition, China did take a stance against cryptocurrencies in other ways by banning all initial coin offerings (ICOs) and foreign exchanges in the years 2017 and 2018 respectively. This was strange considering that China was the number one hotspot for all bitcoin activity at one point.

It appeared, however, like China was beginning to loosen its tight grip around the crypto industry, but now the country seems ill-equipped to cover the growing demands of miners. Authorities in the province of Sichuan, for example, are issuing an order to miners in the area asking that they lessen their extractions and slow their operations down somewhat.

The mining process requires exorbitant levels of electricity. To save energy and time, regulators are thinking ahead and asking that miners keep things to a minimum to ensure electricity can be utilized fairly amongst all the country’s leading mining firms. It is estimated that bitcoin uses as much as 30 terawatt-hours of electricity around the world.

This can’t be a good sign considering it was reported in mid-December of last year that China ultimately controlled much of the world’s crypto mining power. If this region is now asking miners to calm down and slow their work a bit, things could be a lot worse than news sources are suggesting.

In addition, it seems China is also doing quite a bit in terms of stopping illicit activity before it can grow to exponential heights. Recently, it was reported that the country took down an illegal mining operation and seized over 7,000 computers and devices that were potentially being used to mine crypto through stolen power, meaning even less electricity for compliant companies. Those involved in the operation are now being questioned by authorities.

Does the Nation Really Have That Much Power?

However, one must question how far China’s efforts can truly go. As mentioned, the country made it clear in 2017 that ICOs were no longer allowed, but it was explained in early January that the funding method was making an “unofficial” comeback considering many new ventures were resorting to ICOs as a means of garnering capital for their operations.

So, if China can’t even stop ICOs fully, does it really have the power to lessen mining activity?