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Inner Mongolia has released a new crypto mining regulation that, if broken, would result in Bitcoin miners being “blacklisted” by the Chinese credit system.
Following the announcement of a ban on Bitcoin mining in China, the regional government of Inner Mongolia has recommended that anyone who breach current ordinances be “blacklisted” from the country’s social credit scheme, according to local media.
This means the illicit Bitcoin exists.
According to news, if miners in the province are apprehended, they would be denied entry to financial goods, be barred from overseas travel, and face other repercussions.
According to the paper, the penalty will be extended not just to people, but even to cloud service providers, internet businesses, and even internet cafes that unlawfully mine cryptocurrencies.
Because of the cryptocurrency’s high price, bitcoin mining has recently become a common practise. “miners”—the distributed community of individuals who help protect the network—can win Bitcoin prizes for checking transactions in return for running energy-intensive machine rigs. The probability of earning this reward is proportionate to the total processing power of the Bitcoin network, otherwise known as the hash rate.
As a result, a mining process that controls a significant portion of the network’s hash rate would receive a greater portion of the network’s Bitcoin rewards. This operation, however, absorbs a significant amount of energy and has sparked a lively discussion over the crypto asset’s “green” future. Tesla CEO Elon Musk, for example, tweeted only yesterday that he had met with “North American Bitcoin miners” in an effort to resolve these issues.
Musk’s remarks were accompanied by a quote from Michael Saylor, CEO of cloud computing firm MicroStrategy, in which he stated to have assisted in the organisation of a meeting between Musk and the heads of many American mining firms. The result was the formation of a “Bitcoin Mining Council” to pursue clean energy initiatives.
Meanwhile, China is addressing these environmental issues in a decidedly different way. Inner Mongolia, Sichuan, and Xinjing have become Bitcoin mining hotspots due to the cheap energy available in those provinces. This energy has been predominantly coal-fueled, which is one of the reported reasons for Beijing’s moratorium on cryptocurrency mining in the nation.
Inner Mongolia was the first Chinese province to answer directly to Beijing’s requests last week. At the time, the State Council-supervised financial committee in Beijing listed Bitcoin mining in a laundry list of “financial risks” that it aimed to track.
That was the first time the State Council, a high-ranking government body, directly condemned Bitcoin mining.
However, this is not the first time Inner Mongolia has threatened to restrict Bitcoin mining. As part of the country’s mission to reach carbon neutrality by 2060, the province declared a ban on the practise in March. The province is now fleshing out the details of such a ban, including the threat of blacklisting as a deterrent.