China is mulling over enforcing a sweeping ban on domestic Bitcoin mining to address environmental concerns over the potential adverse impact of crypto mining operations, British online newspaper The Independent reported April 9.
According to the report, China’s National Development and Reform Commission (NDRC), the country’s economic planning body, has recently labeled Bitcoin mining an “undesirable industry,” adding it to the agency’s revised list of 450 industrial activities which it is looking to either foster or eradicate, with digital currency mining among those targeted for elimination.
While there is still no set timeline when crypto mining operations would be completely banned from the country, the agency has already begun a public consultation period which would last until May 7. Should China ultimately crack down on the domestic crypto mining sector, the move would have massive repercussions on the Bitcoin network, as the vast majority of global mining operations are currently headquartered in China.
Due to the country’s inexpensive electricity largely produced by coal-fueled power plants, crypto mining operations in China have been proven to be significantly more lucrative compared to other jurisdictions.
According to current estimates, Bitcoin mining expends significantly more energy compared to the power consumption of the whole nation of Ireland, which could potentially raise global warming above 2C in just roughly 20 years from now, according to climate experts.
As pundits posited, eliminating Bitcoin mining operations in China will massively impact Bitcoin’s price, which could be viewed as a positive development for crypto investors.
As eToro market analyst Mati Greenspan argued:
“If this ban does end up happening, it is more likely to push bitcoin prices up than down. The loss of cheap Chinese electricity would raise the mining cost, which is net positive on price.”
Underscoring the possible effect of China’s potential crypto mining ban on Bitcoin’s global infrastructure, Cudo Miner CEO Matt Hawkins also emphasized that:
“If local authorities begin targeting mining farms, this could have a substantial impact on bitcoin’s global infrastructure. People talk a lot about the risks of a 51 per cent attack, but the problem with accumulating so much centralised hash power in areas such as China is that – should it be turned off – the bitcoin network’s performance will be harmed.”