Inner Mongolia Development and Reform Commission: the future will continue to high pressure regulation of virtual currency mining

Inner Mongolia Autonomous Region is now once again increasing the regulation of virtual currency mining.

Inner Mongolia Development and Reform Commission: the future will continue to high pressure regulation of virtual currency mining

As one of the major exporting provinces of cryptocurrency computing power, Inner Mongolia Autonomous Region is now once again increasing the regulation of virtual currency mining.

On May 18, Inner Mongolia Development and Reform Commission issued an announcement to set up a reporting platform for virtual currency “mining” enterprises and to fully accept reports on virtual currency “mining” enterprises.

The scope of the report includes: virtual currency “mining” enterprises (including other hidden forms of “mining” enterprises and subjects); virtual currency “mining” enterprises disguised as data centers to enjoy preferential policies in terms of tax, land, electricity prices, etc. “Enterprises that provide services such as leasing space for enterprises engaged in virtual currency mining; enterprises that obtain electricity supply through illegal means and engage in virtual currency mining.

The reporter called the reporting phone number in the announcement, and the person who answered the phone said that the reporting enterprises do not distinguish between hydropower mining and coal mining, and even if clean energy such as hydropower is used as electricity, there is a standard coal factor for energy consumption conversion at the end. The purpose of this announcement is closely related to Inner Mongolia’s energy consumption “double control” goal, in line with the “carbon peak” and “carbon neutral” policy trend, the future of Inner Mongolia for virtual currency mining regulation The future regulation of virtual currency mining in Inner Mongolia will still be in a high pressure situation.

How much energy does “mining” consume?
The energy consumption and emissions of virtual currency mining involve two main types of energy – electricity and machines. Because of the large computer calculations and authentication transactions involved, mining requires a huge amount of electricity, and those discarded mining machines and parts, which also have a direct and indirect impact on the environment.

According to a cryptocurrency mining energy consumption research index from the University of Cambridge, bitcoin mining consumed 133.68 terawatt hours (TWh, 1 TWh = 100 million kWh) of electricity annually as of May 19. By analogy to a country, this is the equivalent of Malaysia’s annual electricity consumption (147.21 TWh) and is already ranked 27th in the world in terms of electricity consumption.

Under the background of “carbon peaking” and “carbon neutral” policies, the huge energy consumption and emission problem of cryptocurrency mining has become a hot topic of discussion in the industry.

On April 6, scholars from the Chinese Academy of Sciences and Tsinghua University published a paper in the journal Nature Communications titled “Policy Assessment of Carbon Emissions and Sustainability of China’s Bitcoin Blockchain Operations,” which suggests that China’s miners account for more than 75% of the Bitcoin network’s computing power, and that intensive Bitcoin mining could undermine China’s efforts to reduce emissions without appropriate interventions and feasible policies.

Last Wednesday (May 13), Tesla CEO Musk suspended bitcoin payments because of the energy consumption of bitcoin mining that is damaging the environment.

Is mining environmentally friendly?
China’s Inner Mongolia, Xinjiang, Yunnan and Sichuan have become the main layout areas of the virtual currency mining industry due to their abundant and cheap coal and hydropower resources.

According to a cryptocurrency mine owner, the mine he operates is located in the southwest region, with a scale of 10,000 ethereum miners, consuming about 290,000 degrees of electricity per day, and the energy used at present is “abandoned water” and “abandoned electricity”, i.e. The energy used is “abandoned water” and “abandoned electricity”, that is, the excess water from the power station and the surplus electricity that the grid cannot accept.

“The price of the power station is generally 0.2 yuan/kWh, but the cost of electricity we pay is 0.26-0.28 yuan/kWh, which is still using waste water and electricity. The aforementioned mine owner said to Science and Technology Daily.

As to whether mining affects environmental protection, Liu Changyou, director of the Blockchain Economy Research Center of Chongqing Industrial and Commercial University, said in an interview with Science and Technology Daily that it mainly depends on the carbon emissions of power generation. If the electricity used for mining is green energy, such as hydropower generation, the carbon emission is less, and if it is coal power, the carbon emission is high.

Zhang Ming, a researcher of the Coinan China Blockchain Research Institute, said in a previous interview with Science and Technology Board Daily that the proportion of hydropower and thermal power used for cryptocurrency mining is dynamically changing due to the influence of “abundant water” and “dry water” periods. The dry period of Yangtze River in China is roughly from December to April every year. During the high water period, hydropower is the dominant power supply, while during the low water period, affected miners may migrate to thermal power sites.

“The core of the environmental issue is to make clean energy power less expensive than coal power. If carbon emissions are added to coal power as a cost, resulting in higher coal power prices than green energy power, then mining will naturally shift to green energy power.” Liu Changyong stressed to the KCI Daily.

The above-mentioned mine owner also mentioned that the cost price of coal power is around 0.33 yuan/degree, but because coal power generation is more stable, even though the price is higher than hydropower, coal power is still the preferred option in terms of revenue ratio.

Looking back at Inner Mongolia itself, the above receiver said that whether it is hydropower or coal power, any form of electricity, there will be a discount coal coefficient for energy conversion, new energy is also counted energy consumption, virtual currency mining enterprises, energy consumption is very high, it is almost no local tax revenue or economic contribution.

This is why Inner Mongolia Autonomous Region became the first province in China to completely ban virtual currency mining.

As a major province of coal power generation, in order to reach the “double control” goal of energy consumption, in March this year, the Inner Mongolia Development and Reform Commission issued the “Several Safeguard Measures to Ensure the Completion of the “14th Five-Year Plan” Double Control of Energy Consumption (Draft for Comments)”, which clearly requires a comprehensive cleanup Shut down the virtual currency mining project, all out by the end of April 2021, while new virtual currency mining projects are strictly prohibited.

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