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Technicians inspect bitcoin mining machines at a mining facility operated by Bitmain Technologies in Ordos, Inner Mongolia on August 11, 2017. Bitcoin is showing no signs of slowing down, the price of the largest cryptocurrency by market value is soaring as it gains greater mainstream attention despite warnings of a bubble in what not everyone agrees is an asset. Our editors select the best archive images on Bitcoin. Photo: Bloomberg
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China plans to deter bitcoin miners by curbing electricity use

China aims to drive cryptocurrency miners out of business by limiting power consumption

Bitcoin
Bloomberg
Bloomberg
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China plans to limit power use by some  bitcoin miners, people familiar with the matter said, a potential challenge to an industry whose energy-intensive computer networks enable transactions in the cryptocurrency.
The People’s Bank of China (PBOC) outlined the plan on Wednesday at a closed-door meeting, according to the people, who asked not to be identified because it wasn’t public. They didn’t detail how authorities plan to enact the curbs.
China has the world’s largest concentration of cryptocurrency mines. SCMP Graphics.
Chinese officials are concerned that bitcoin miners are taking advantage of low power prices in some areas and affecting normal electricity use in some cases, the people said. Local officials have been asked to investigate the high consumption associated with the industry, they said. Some Chinese miners have set up around hydroelectric facilities in the provinces of Sichuan and Yunnan.

The curbs will also involve other regulators such as the National Development and Reform Commission (NDRC), which oversees the power supply. The PBOC didn’t immediately respond to a fax requesting comment sent after the close of regular business hours.

“This may have contributed to bitcoin coming off its daily highs and electricity usage certainly appears to be a significant challenge for the cryptocurrency in the years ahead,” said Craig Erlam, senior market analyst at online trading firm Oanda in London.

Bitcoin, which surged 15-fold last year, pared gains on Wednesday and traded around US$15,086 on Thursday.

Explainer: Key questions you need answered about bitcoin

China is home to many of the world’s largest bitcoin miners, who use massive computing power to verify transactions in the cryptocurrency. The global industry uses as much electricity as 3.4 million homes in the US, according to the Digiconomist Bitcoin Energy Consumption Index.

Beijing’s scrutiny of miners follows a sweeping cryptocurrency crackdown last year. Authorities outlawed initial coin offerings in September and have called on local exchanges to halt virtual currency trading.

This article appeared in the South China Morning Post print edition as: Power crunch looms for bitcoin miners
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