Last Thursday, the National Development and Reform Commission released a draft amendment to the industry structure adjustment list to solicit public opinions, which proposes eliminating the “mining” of virtual currencies.
Among all the virtual currencies, the most typical and well-known is Bitcoin, which allows the “miner” to produce a certain piece of code via a computer program and register it as a virtual currency.
The computation process is extremely complicated and consumes large amounts of electricity. Data from Cambridge University shows that the annual electricity consumption of Bitcoin mining is about 149.37 terawatt-hours, which exceeds that of Malaysia, Ukraine and Sweden and nears that of Vietnam, which ranks 25th on the world electricity consumption list.
Its electricity consumption even shows an upward tendency because the difficulties of the computation increase with more “miners” participating, which in turn attracts the latter to “mine” more intensively.
The high-energy consumption of “mining” virtual currencies has already attracted worldwide attention, because it causes large amounts of carbon dioxide emissions. The European Central Bank for instance has clearly warned that the “excessively high carbon footprint of crypto assets is worrying”. Even Bill Gates has expressed concerns about the energy consumption of virtual currency, saying that “Bitcoin consumes more electricity in the process of each transaction than any payment method known to mankind”.
All these make it rational to regulate the Bitcoin “mining” industry. That also shows that virtual currencies will be further away from gaining legitimacy in China. The only hope of the future lies in developing industries with higher social value and higher efficiencies.
Actually, “mining” virtual currencies entered the list in 2019 but it was removed later. That it has now been put back on the list shows policymakers’ determination to curb it.
It can be expected therefore that the future mainstream industry development direction is to further embrace more energy-efficient and socially valuable industries. China Daily