Technology

China seeking to eliminate cryptocurrency mining

China lists cryptocurrency mining among backward processes, technologies, equipment and products that should be eliminated.

China seeking to eliminate cryptocurrency mining


China’s National Development and Reform Commission is seeking to eliminate cryptocurrency mining.

 

This is according to a draft proposal released by the commission on 8 April 2019 for revising the Catalog for Guiding Industry Restructuring.

 

The National Development and Reform Commission is a government agency in China that has control in the administration and planning of the Chinese economy.

 

The commission releases the Catalog for Guiding Industry Restructuring, which is a list containing industry activities that should be encouraged, restricted or eliminated.

 

In the draft proposal for this year’s revision of the Catalog for Guiding Industry Restructuring, among the 450 industrial activities that should be eliminated is “virtual currency ‘mining’ activities,” which the proposed revision describes as “the production process of virtual currency such as Bitcoin.”

 

Cryptocurrency mining involves receiving a unit of cryptocurrency as a reward for validating cryptocurrency transactions through the use of computing power.

 

The computing power used in cryptocurrency mining comes from specialized hardware called mining rigs, which has been known to consume large amounts of electricity.

 

China is a country known for cryptocurrency mining as the cheap price of electricity in the country is ideal for the operation of cryptocurrency mining farms.

 

The ban on cryptocurrency mining that the National Development and Reform Commission is recommending would lead to cryptocurrency miners to search for another country with cheap electricity.

 

The ban will also affect Chinese companies producing cryptocurrency mining hardware, which are known to be among the largest in the world.

 

In a statement announcing the public consultation on the proposed revision of the catalog, the National Development and Reform Commission said that industry activities that fall under the elimination category are those that involve “backward processes, technologies, equipment and products” that are not in line with the law, considered as unsafe, and causes waste and pollution.

 

The commission also said that public consultation on the proposed revisions started on 8 April 2019, and will end on 7 May.