Why The Chinese Government Started Mining Bitcoin (BTC)

Why The Chinese Government Started Mining Bitcoin (BTC)

Reporter Colin Wu shared news published by Chinese state media PengPai related to Bitcoin mining activities by the national government. At the very least, China’s view of cryptocurrencies is ambiguous, but according to the report they have been dabbing with BTC.

The state media confirmed a rumor on the Beijing government’s collection data center being used in BTC mining activities. The report stated that data centers in China’s capital were asked to submit feedback to “sort out the situation”.

According to the Beijing Economic and Information Bureau, there were concerns about the energy consumption related to these activities. PengPai quotes Yu Jianing, rotating Chairman of the Blockchain Special Committee of China, to claim that the country’s environmental requirements could lead to crypto mining being more “strictly regulated”. Jianing said this will be “inevitable”.

Chinese authorities are allegedly “paying more attention” to the sector. The state media claims Bitcoin mining and the equipment required “consume a lot of electricity to run”.

An investigation published in Nature Communications, conducted by the Chinese Academy of Sciences and Tsinghua University, claims that BTC mining activities in China will peak at 296.59 TWh. In consequence, the researchers expected 130.5 million metric tons of carbon emissions to be generated.

Therefore, pressure in the country to pass a crypto mining regulation could increase. However, the same research claims that 75% of BTC hashrate is in China. This data has been contested by many external sources. Wu added:

This caused some panic in China.  However, the Chinese government said it was only conducting an investigation.  Data centers are difficult to use for Bitcoin mining and are mainly used for ETH Filecoin.

Bitcoin’s Network Recovers After Energy Outages in China

Blackouts in the Chinese province of Xinjiang took a toll on Bitcoin’s hashrate. Mining operations were halted due to security inspections by the local government.

Although this crypto sector was affected, Wu said the measures were not targeting BTC mining but were part of an “overall safety” study of the electrical system in northwestern China. Data provided by OKLink and shared by the reporter shows Bitcoin’s hashrate has recovered.

Source: Colin Wu

On its way to levels seen before the outages, when the hashrate was at 172 TH/s. Currently, it stands at 154 TH/s. As a consequence, Bitcoin’s network has experienced high levels of congestions with transaction fees skyrocketing towards an average of 150 sat/vB (around $11).

BTC trades at $53,247 with sideways movement in the 1-hour chart and small losses in higher timeframes. In the 30-day chart, BTC has a 7.5% loss.

BTC moving sideways in the daily chart. Source: BTCUSD Tradingview

editorial staff