China Will Limit Miners’ Power Usage.
The People’s Bank of China, through a report, says that it can pressure local governments in the country to regulate bitcoin miners’ power usage. Specifically, the information was given to members of the Beijing Internet Financial Risks Remediation Group in the framework of a meeting in which the main purpose would be to carry out a movement against the Bitcoin miners in which the scale of their production is reduced. While admitting that it is powerless to regulate bitcoin mining on its own, PBoC officials reportedly said they can indirectly push the agenda by asking local governments and authorities to do so.
It should be noted that mainland China is home to approximately two-thirds of the bitcoin hashrate, largely due to the widespread availability of surplus electricity and cheap labor. Consequently, it could lead to a serious shift in the geographic concentration of bitcoin hashpower, depending both on how quickly and to what degree local governments begin limiting miners’ power consumption.
However, many industry observers believe that a crackdown on Chinese bitcoin mining could benefit the ecosystem in the mid-term, as it will lead to greater decentralization of the mining industry, as well as the prohibition of exchange of bitcoins for the cryptocurrency trade.
In fact, by foregoing an outright ban in favor of a “gradual” reduction in power usage, the government is doing the industry a favor, as it will give miners located outside of China ample time to scale up their operations to compensate for the reduced hashrate coming out of China, making it less likely that the network will encounter a serious disruption.
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