Chinese regions Xinjiang and Qinghai have banned crypto mining while New York has passed a bill from Senate that restricted permits for PoW (Proof of Work) mining, including Bitcoin (BTC), both based on environmental grounds.
China Continues To Ban Crypto Mining
With Xinjiang, the local government of Changji prefecture, a city within Xinjiang, reportedly commanded crypto mining companies to shut down crypto mining activities by 2 pm on the 9th of June (assumed to be local time), which would be yesterday.
Modified after chokkicx / Getty Images
The Qinghai provincial government also sent a notice, but on Tuesday, telling local governments to shut crypto mining in their areas.
Modified after chokkicx / Getty Images
Such bans follow bans from province Inner Mongolia on crypto mining, once the global powerhouse of BTC, which were done last month. The main aim of the ban in Inner Mongolia was to meet Beijing's ambitious goal of achieving carbon-neutrality - making the same amount of carbon as is being absorbed by the environment - by 2060. Such an aim can also be inferred to apply to the other two provinces mentioned Xinjiang and Qinghai, China looking at the environmental risks associated with its rapid development, including crypto mining.
The bans that China has made on crypto mining does help China become more sustainable, lowering the demand/usage of electricity in China. Although it does impact the crypto industry by reducing the number of miners available, China taking a great majority of the force would be needed to meet the goals that China is looking for. To be fair, the Earth and its biosphere come on top of crypto, and this is what China sees in putting its ban.
With China being the number one crypto miner, having bans on crypto mining would reduce the difficulty of crypto mining and mining diversity, especially since most other countries are incomparable to the mining power of China. This is quite ironic thinking that communist China, which is widely known to have severe censorship and watching government, is powering the crypto world, aimed at being free and decentralised.
There would have short-term impacts on the crypto industry, but over the long run, much more beneficial impacts will be felt both by China with its bans and the crypto world in its more free and diverse state.
Although such bans have been made, BTC has jumped by about 10% at the time of writing over the past 24 hours, many other cryptocurrencies within the top 100 leaderboard following with the highest gain of the day with Kusama (KSM) at +15.7%.
New York Passes Bill To Restrict Permits PoW Crypto Mining
PoW (Proof of Work) is a form of blockchain technology that basically involves a third party confirming the transaction between two trading parties in a transaction. The third party makes sure that everything is doing well with no fraud or errors, and passes the transaction through as intended. PoW powers many of the significant cryptocurrencies within the crypto globe, the two most popular being the crypto kings BTC and Ethreum (ETH). The problem with PoW is that it needs a lot of computing power to run, and so needs a lot of electricity. The massive need for electricity brings the issue of supplying the demanded electricity, especially with the environment as most of the world's electricity comes from fossil fuels (coal, oil and gas).
Elikrieg, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons
New York has passed a bill (S6486B) yesterday that looks at stopping any crypto mining permits that mine PoW cryptocurrencies within its territory. The bill was passed by the New York State Senate, sponsored by Democratic Senator Kevin Parker, in a 36-27 margin, moving on to the democratic-controlled State Assembly. From the information found, it is inferred that those with a permit before the restriction is placed, if it does achieve enforcement, will still be allowed to mine. It is only those looking at making new permits for PoW crypto mining in New York.
The New York State Senate sent a tweet on this passed bill yesterday. It is attached below and can be seen here:
.https://twitter.com/NYSenate/status/1402380665467854854
- NYSenate
The bill mentions the purpose of such restrictions, referring to the reasons explained earlier, going as follows:
Many fossil fuel power plants have been shut down across the state in recent years due to reduced energy demand, improved transmission capacity and non-economic carbon-based fuel sources. Consolidated operations that use proof-of-work authentication methods to validate blockchain transactions are bringing these plants back online, with behind- the-meter operations that greatly exceed the previous intermittent usage, and can cause significant negative impacts to air quality especially in environmental justice communities.
Although the restrictions are not in place, only passing the New York State Senate onto the State Assembly, it can be expected that the bill will eventually pass through, the environment a significant agenda for the world as environmental issues escalate. It is even more likely when considering the State Assembly being a Democratic majority, headed by President Joe Biden who has called for crypto tax some days back.
Further Reading
Forkast - China’s Xinjiang and Qinghai regions ban cryptocurrency mining - https://forkast.news/china-xinjiang-qinghai-regions-ban-crypto-mining/?utm_source=rss&utm_medium=rss&utm_campaign=china-xinjiang-qinghai-regions-ban-crypto-mining
Forkast - Inner Mongolia takes steppes to tighten crypto mining ban - https://forkast.news/inner-mongolia-takes-steppes-to-tighten-crypto-mining-ban/
Decrypt - New York's Stand Against Bitcoin Mining Passes Senate - https://decrypt.co/73202/new-yorks-stand-against-bitcoin-mining-passes-senate
Forkast - New York State passes bill restricting Bitcoin mining - https://forkast.news/new-york-state-passes-bill-restricting-crypto-mining/?utm_source=rss&utm_medium=rss&utm_campaign=new-york-state-passes-bill-restricting-crypto-mining
Wikipedia - Proof of work - https://en.wikipedia.org/wiki/Proof_of_work
Wikipedia - Proof of stake - https://en.wikipedia.org/wiki/Proof_of_stake