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Inner Mongolia Bans Cryptocurrency Mining

Super Bitcoinman will need to hide his secret mining identity

Super Bitcoinman will need to hide his secret mining identity (Image credit: Shutterstock)

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.

  • Krotow
    Good riddance. Now rinse and repeat worldwide.
    Reply
  • chalabam
    Inner Mongolia will be poorer, and will watch how the rest of the world gets richer.

    This is like mining a limited ammount of gold. At the end only some countries will get the purchasing power, and Inner Mongolia will not be one of those.

    Then they will blame capitalism.
    Reply
  • daworstplaya
    Krotow said:
    Good riddance. Now rinse and repeat worldwide.

    Agreed, crypocurrencies (aka ponzi schemes) need to die and die quickly. Complete waste of electricity.
    Reply
  • CooliPi
    Ponzi schemes like central banking need to die and die quickly. Complete waste of Earth.
    Reply
  • Co BIY
    Central Banks are bad because they sometimes poorly manage the money supply and the value fluctuates so much it ( 4%/year?) that it creates economic hardships.

    But Crypto is good because it keeps wildly fluctuating in value (400%) for no underlying reason and is useless as currency.

    Central Banks are bad because they are under the influence of large governments and sometimes pressured to take actions that may favor some interests over others.

    Crypto Currencies are dominated by the originators some of them completely Anonymous and untraceable. The mysterious Satoshi Nakamoto owns 5% of all bitcoin and that is good. Just clues in the blockchain that the founders had transferred value could crash the whole scheme.

    It is entertaining though!
    Reply
  • CooliPi
    Co BIY said:
    Central Banks are bad because they sometimes poorly manage the money supply and the value fluctuates so much it ( 4%/year?) that it creates economic hardships.

    But Crypto is good because it keeps wildly fluctuating in value (400%) for no underlying reason and is useless as currency.

    Central Banks are bad because they are under the influence of large governments and sometimes pressured to take actions that may favor some interests over others.

    Crypto Currencies are dominated by the originators some of them completely Anonymous and untraceable. The mysterious Satoshi Nakamoto owns 5% of all bitcoin and that is good. Just clues in the blockchain that the founders had transferred value could crash the whole scheme.

    It is entertaining though!


    I was referring to the fact that central banks AND (mainly) commercial banks create money out of debt. So, more than 80% of new money is created by commetcial banks. They buy the economy.

    Neither nowadays banking system nor cryptocurrencies can stop itself from needing more resources. So, any of them would eventually consume all the resources.

    Energy efficiency of cryptocurrencies is tragic, not usable as coins. Only as some speculative stuff.

    But don't holf your breath, the same applies to banking. Both are ponzi schemes.

    While cryptocurrencies would eventually eat all the energy we produce, private money creatinon (referred to above as central banking) will eat all of the land, resources, energy.

    Central banking (i.e. private money creation) was practically forbid by U.S. constitution if I remember correctly. But as we can see, it means nothing. In the U.SA. , since 1913 it creates ever increasing amount of debt, essentially transferring wealth to those who own the printing machines (those who can create debt).
    Reply
  • watzupken
    chalabam said:
    Inner Mongolia will be poorer, and will watch how the rest of the world gets richer.

    This is like mining a limited ammount of gold. At the end only some countries will get the purchasing power, and Inner Mongolia will not be one of those.

    Then they will blame capitalism.
    I think in reality only a few miners will get richer, and those miners may not even be a Mongolian. They are mostly just capitalizing on their cheap power to set up mining stores there. So not sure how will Mongolia get richer though. By selling cheap power to miners?
    Reply
  • cryoburner
    chalabam said:
    This is like mining a limited ammount of gold. At the end only some countries will get the purchasing power, and Inner Mongolia will not be one of those.
    Except cryptocurrencies are not actually limited. Any given currency might be, but as soon as one becomes unprofitable to mine, the miners will just move on to another. Launching a new cryptocurrency takes little effort, so they are practically limitless in supply. At least until the bubble bursts and those left holding onto them who didn't cash out early end up losing lots of money. Those who did, on the other hand, can be happy that they profited from what will likely amount to a scam at the expense of others. It's largely just a speculative market with no particularly useful product behind it, after all. Maybe a few will manage to stabilize and survive in the long term, albeit with heavy government oversight controlling them, removing their main selling point, but most are destined to fail as an actual currency system.
    Reply