China to Curb Power Supply for Some Bitcoin Miner
China plans to limit the use of power by some bitcoin miners, people who are aware of the problem say, a potential challenge for the industry that computer-intensive networking enables the occurrence of transactions in crypto.
The People's Bank of China outlined the plan at a closed-door meeting, according to people who asked not to be identified because it was not published. They did not specify how the authorities planned to impose restrictions.
Chinese officials are worried that bitcoin miners have been utilizing low power prices in some areas and affecting normal electricity usage in some cases, the people said. Local officials have been asked to investigate the high consumption associated with the industry, they said. Curbs will also involve other regulators such as the National Development and Reform Commission, which oversees power supplies.
While the proposed limitation is unlikely to have a noticeable effect on transaction speed, it also highlights the global concerns of bitcoin miner energy consumption. The industry now uses electricity as much as 3.4 million households in the US, according to Digiconomist Bitcoin Energy Consumption Index. China is home to many of the world's largest miners, some of which have built hydroelectric facilities in Sichuan and Yunnan provinces.
"This may have caused bitcoin to drop from its daily highs," said Craig Erlam, senior market analyst at online trading company Oanda in London. "The use of electricity is certainly a significant challenge for crypto in the future."
Bitcoin, which jumped 15-fold last year, eased gains on Wednesday and traded around $ 14,900 on Thursday.
The PBOC does not immediately respond to fax requests sent after the regular business hours closing. A report circulated in social media on Wednesday that China had asked for bitcoin miners to close incorrectly, Caixin reported, citing an "authoritative person." The PBOC did not hold an internal meeting on Wednesday, Caixin added, without naming it.
Chinese researchers against miners followed the crackdown of cryptocurrency that swept last year. The authorities banned the initial coin offer in September and have asked for a local exchange to stop trading of virtual currencies.
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