China Ramps up Crackdown on Bitcoin Mining

Chinese bitcoin mines are closing as quickly as Blockbusters in the 2000s.On Friday, local authorities in Sichuan province halted operations at the 26 largest local mines. Taken together with similar moves in other mining hubs, more than 90% of China’s bitcoin mining capacity is now at least temporarily offline, according to the state-run Global Times.

Why crack down? As Elon Musk has realized, bitcoin mining—the process of creating new digital tokens and maintaining the blockchain ledger—requires vast amounts of energy.

Authorities are concerned about the environmental impacts of mining and the strain it puts on electrical grids.

Why it matters: The restrictions mean bitcoin mining could shift out of China, which handled 75% of the world’s mining capacity before the increased scrutiny, and arrive in...America? Miners continue to open up facilities in states like Texas and South Dakota, and in Kentucky, you’ll even get a tax break if you spend at least $1 million on new mining equipment.

Bottom line: China’s mining crackdown is widely seen as responsible for dampening bitcoin prices, which are now 44% below their all time high.Why it matters: The restrictions mean bitcoin mining could shift out of China, which handled 75% of the world’s mining capacity before the increased scrutiny, and arrive in...America? Miners continue to open up facilities in states like Texas and South Dakota, and in Kentucky, you’ll even get a tax break if you spend at least $1 million on new mining equipment.