In Inner Mongolia, an autonomous region of China, Bitcoin mining farms (BTC) could be banned by April. Cryptocurrency miners would then face massive relocation. Is the mining industry threatened?
A threat to Bitcoin mining?
In Inner Mongolia, an autonomous region in northern China, new regulations on cryptocurrency mining are about to emerge. Indeed, the government is increasingly interested in the issue of energy consumption. As of 2020 in China, certain measures have been taken as part of the country’s commitment to “carbon neutrality” by 2060.
The objective of these new measures is to help the region of Inner Mongolia to drastically reduce its energy consumption . By 2022, the region hopes to reduce its energy consumption by around 1.9%.
Officially published last week, this bill would include the closure of Crypto Genius mining farms (BTC) by the end of April 2021 across the region.
However, many minors are attracted to Inner Mongolia, as its energy is known to be cheap . If these new measures are adopted, Bitcoin miners will have to find a new home to continue their business.
Inner Mongolia is currently one of the largest regions in the world where Bitcoin mining farms are located, according to a Cambridge University study .
In 2020, China alone accounted for 65% of the Bitcoin network’s global hash rate, including:
What future for mining in Inner Mongolia?
The question of carbon neutrality questions the community of cryptocurrency miners. Inner Mongolia derives the majority of its energy from coal and this use is expected to increase costs . Therefore, more mining equipment is expected to be transferred to other regions where hydropower is used as the main source of electricity. This is already the case for Sichuan and Yunnan.
This remark was taken up by Colin Wu, a local journalist whose comments are shared by Edward Evenson, the director of business development at Braiins (operator of the mining pool Slush Pool). Edward Evenson believes that miners will simply find a way to relocate and that there will be no significant impact on Bitcoin’s hashrate .
“It also means that a higher percentage of mining in China is likely to be done with renewable energy, as miners in Inner Mongolia primarily use coal. With the rainy season starting in May, a lot of miners from Inner Mongolia would be moving to Sichuan around this time anyway, ”he told Decrypt .
In addition, minors living in Inner Mongolia have already been the target of restrictions on their activity. In 2020, subsidies that reduced electricity costs were removed by the local government and 21 Bitcoin mining companies were impacted.