It was only a matter of time before China slapped a ban on Bitcoin (BTC) mining, trading and crypto services. To do anything with Bitcoin anywhere in the People’s Republic, one needs a special exemption. The Chinese government’s given reason for the Bitcoin crackdown is to reduce its well-documented climate impact. Regardless of the amount of truth in this explanation, one thing is clear: China’s righteous anger toward electricity-guzzling and carbon-spewing mined cryptocurrencies in the service of Earth’s climate is only the first shot in an impending global showdown over Bitcoin and other crypto projects that rely on proof-of-work (PoW), the complicated crypto security mechanism we subsume under “mining.” This does not seem like a battle crypto can or will win.
For many cryptocurrency enthusiasts who are holding Bitcoin, this is a difficult realization to face. Luckily, there is a helpful parallel, and it even has the same name: coal mining. Coal is on its last legs because there are cleaner, cheaper, more efficient and more technologically advanced alternatives.
Related: Carbon-neutral Bitcoin? New approach aims to help investors offset BTC carbon emissions
Admittedly, coal isn’t going down without a fight, backed by monied corporate lobbies and powerful politicians often amenable to generous campaign donations. Even so, if your financial adviser told you he had a really good feeling about investing in coal, you would probably get a new financial adviser. For similar reasons, it might be time to accept the fact that mining, from coal to crypto, might soon be a relic of the past.
Short-term effects of China’s Bitcoin ban
A combination of inertia and hesitation to quit mining have temporarily cushioned the full impact of China’s war on Bitcoin. After the initial shock, the United States sprung at the opportunity created by the Chinese ban to become the world’s new mining hub. In Asia, Kazakhstan and Malaysia are ramping up mining operations, as are Germany and Ireland in Europe and Iran in the Middle East, according to recent stats. The effort to keep crypto mining chugging along is making…