China could ban Bitcoin mining in the country due to the concerns that Bitcoin mining is affecting the environment owing to the high electricity that it takes. Trading crypto and ICO which is used to fund a project are already banned in China.
China also holds around 70 to 40 percent of the mining power of the whole world.
What is Bitcoin mining?
Bitcoin mining is a process in which a miner validates a transaction done on the Bitcoin network, in return, they are rewarded with Bitcoins.
Since the rewards of mining are high, miners compete with each other using powerful hardware.
It is interesting to note that the combined computing power of Bitcoin hardware around the world is 1000 times more powerful than all top 500 supercomputers combined.
Few Bitcoin miners have started very huge mining operations also known as mining farms. Majority of these farms are located in China.
Majority of these mining farms are in China and have more than 81% to the total hash rate of the whole network.
According to a report by Ars Technica, each Bitcoin transaction requires 250kwh of electricity. This power is sufficient to run a house for 9 days continually.
The report further explains that current annual consumption of the Bitcoin network is 32TWh which equals Denmark’s annual consumption. Some analysts also predict that at this rate, Bitcoin will use electricity equalling global consumption.
All these things might have pushed China to take the decision for a mining ban. The NDRC which is a planning agency of China has announced a list of 450 industrial establishments listing what it supposes are mining operations.
Even though they have not released an official date for the commencement of the ban. The consultation is on 7 May.
Impact on the BTC price
According to market analyst Mati Cgreenspan, a ban on BTC mining will only drive the price in an upward direction.
Future of Chinese miners
Many miners have already shifted their base of operation to Australia’s coal mines for cheap electricity. Others have moved to Quebec considering the vast amount of hydro energy.