Digging crypto-currency consumes valuable natural resources, which is why China wants to ban it

The Chinese Development and Reform Agency in its latest publication states that digging cryptocurrencies consumes valuable natural resources, turning them into worthless (according to China) cryptocurrencies, and therefore this practice must be banned. Chinese citizens have until May 7 to express their opinion on the subject.

I am extremely curious how many people will dare to express an opinion contrary to the publication of the government agency. The use of civil liberties is not seen very well by the local authorities. And this one wants to forbid the digging of cryptocurrencies for a very simple reason.

China: prohibition of digging cryptocurrencies

A cryptocurrency excavator is nothing more than a fast computer that uses the computing power of processors and graphics cards solves a mathematical problem that results in a new block in the blockchain chain in which all transactions in a given cryptocurrency are saved. In short: excavators are in fact responsible for maintaining the infrastructure of a given cryptocurrency - the profit (ie the cryptocurrency itself) is granted to the owners of excavators in the form of payment (or reward - if you will) for this service.

And you know - the more working excavators, the better. The whole operation is best organized somewhere, where electricity is very cheap. China has a very cheap electricity, which is why they quickly became the main place where crypto-currency mines were established. Currently 74% all crypto-transactions are confirmed in Chinese mines.

The phenomenon of cryptocurrencies has now reached such a scale that it has quite a significant impact on the environment. According to research conducted by J. Krause and T. Tolaymat, power plants emit from 3 to 15 million tonnes of carbon dioxide annually, producing electricity needed to supply all active excavators. Some regions of China, very liked by crypto-digging enthusiasts, still rely fully on coal-fired power plants, so the proposal of the Chinese Development and Reform Agency sounds quite sensible.

Of course, this case has many more layers

China has been trying to get rid of cryptocurrencies from its territory for some time. The Chinese government is doing what it can - from closing Chinese cryptocurrencies, by blocking its residents access to foreign platforms of this type, to the awarding of negative points in the national system of social trust . Adding to this argument about wasting natural resources and polluting the environment somehow does not surprise me.

The whole thing also shows that the celebrated independence of the cryptocurrency system, which is still being told by its enthusiasts, is not entirely true. Maintaining the necessary virtual cryptocurrencies for the infrastructure requires already very real resources in the form of computer hardware and electricity. By controlling at least one of these things, it's very easy to control cryptocurrencies. The Chinese authorities seem to understand it perfectly well.



Digging crypto-currency consumes valuable natural resources, which is why China wants to ban it

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