Cryptocurrency Mining Up for Elimination In China for Being Wasteful and 'Backward'
China's economic planning agency is considering eliminating cryptocurrency mining along with numerous other products and processes. Comment period is open until May 7.
The lucrative cryptocurrency mining industry is being considered for elimination in China along with numerous sectors and production processes deemed wasteful and “backward.”
As reported by the South China Morning Post, the National Development and Reform Commission (NDRC)—a vast agency that plans the Chinese economy—announced on Monday the start of a public comment period regarding which technologies, products, and processes should be encouraged, restricted, or eliminated entirely in the country. As Bloomberg pointed out, cryptocurrency mining appears on a recent list of industries being considered for elimination.
According to the Chinese government, qualifications for elimination include “seriously polluting the environment” and being a “serious waste of resources and energy,” in addition to being unsafe or running afoul of the law.
“The elimination categories are mainly backward processes, technologies, equipment and products that do not meet the requirements of relevant laws and regulations, do not have safe production conditions, seriously waste resources, pollute the environment, and need to be eliminated,” according to an NDRC release.
If cryptocurrency mining is selected for elimination, the South China Morning Post noted, investments and loans in that industry will be banned and authorities will be able to raise electricity prices—a likely death sentence for many mining outfits.
Cryptocurrency mining is the computational process that both secures blockchains, like Bitcoin and Ethereum, and mints new units of virtual currency as a reward to miners. Mining is an energy-intensive process because mining operations—often, warehouses filled with machines crunching math problems to find a particular value—run 24/7 and consume a lot of electricity.
The technology’s thirst for electricity has been a flashpoint of intense criticism from detractors who see it as not being environmentally sustainable. Last year, the town of Plattsburgh, New York put an 18-month moratorium on new cryptocurrency mining operations due to energy concerns.
Mining is a lucrative industry in China, where miners have set up shop in industrial parks and the mountains of Sichuan, all in name of finding cheap electricity. Sometimes, that means using hydropower from a mountain stream, and sometimes that means relying on energy from coal-fired plants. One of the most globally important and deep-pocketed cryptocurrency mining companies and hardware manufacturers, Bitmain, is Chinese.
This isn’t the first time the cryptocurrency industry has been under fire in China. In 2017, the Chinese government halted trading of the Chinese yuan to cryptocurrency. Last year, the government indicated that mining operations should prepare to exit the country but, as the South China Morning Post reported, that didn’t go anywhere. Still, companies like Bitmain have already begun looking at establishing operations abroad—for example, in the hydro-rich province of Quebec in Canada.
Spokespeople for Bitmain were not immediately available for comment.
The public comment period on the planning initiative is open until May 7, according to an NDRC release.
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