Coin World News Report:
Whether in China or globally, the core issue in accepting or even promoting Bitcoin (BTC) mining is “how to solve environmental and energy problems.”
Written by: Liu Honglin, Iris
I will ensure that the United States becomes the capital of global cryptocurrency and the superpower of Bitcoin. If cryptocurrency will define the future, I want it to be mined and minted in the United States, not elsewhere. If Bitcoin is going “TO THE MOON” as we say, I want the United States to lead this trend.
– Donald Trump
Since Trump made these remarks, Bitcoin mining and the value of Bitcoin have become the focus of the market. According to an investor report released by analysts from investment banking giant JPMorgan on October 16, the 14 listed Bitcoin miners in the United States currently control 28.9% of the global hash rate, and their market dominance is still growing. At the same time, as the US presidential election entered the countdown in October, whether Trump can be re-elected directly affected the Bitcoin (BTC) market. Some reports have suggested that if Trump wins, the price of Bitcoin may skyrocket.
* Image source: Voting status of various states in the United States on October 23
In addition to the US election, the latest positive news related to Bitcoin mining globally is the Bitcoin mining law that has come into effect in Russia, which is expected to enhance Russia’s position in Bitcoin hash rate. Previously, Manco Law Firm has published several articles such as “Web3 Lawyer: How to interpret the US purchase of 1 million Bitcoins as national reserves?” “Bitcoin welcomes “Made in America”, cryptocurrency mining becomes the new focus of major power competition” “Web3 Lawyer: Is Bitcoin mining officially legal in Russia through the cryptocurrency mining law?” analyzing the important position of Bitcoin reserves and mining industry.
However, whether in China or globally, the core issue in accepting or even promoting Bitcoin (BTC) mining is “how to solve environmental and energy problems.”
The 7 Sins of Bitcoin Mining: Not Environmentally Friendly
Restrictions on Bitcoin mining can be said to be a major trend globally in recent years, with China’s regulatory policies being the most typical.
1. China
China used to be the absolute center of Bitcoin mining worldwide, with nearly 75% of the global hash rate. However, the “Notice of the National Development and Reform Commission and other departments on the rectification of virtual currency ‘mining’ activities” issued in 2021 pointed out that Bitcoin mining has led to energy waste, especially in energy-consuming provinces such as Inner Mongolia and Sichuan. Its high power consumption contradicts China’s carbon neutrality goals, making Bitcoin mining the first target to be hit. Against this background, domestic miners have flocked to overseas. However, according to the report “China has never banned Bitcoin mining” by well-known Web3 media Bitcoin Magazine, China’s Bitcoin mining hash rate was only “zeroed out” once in 2021 and then restored. Currently, China’s mainland hash rate ranks second globally, second only to the United States.
2. Kazakhstan
After the ban in China, a large number of miners have migrated to Kazakhstan, where energy is relatively abundant and electricity prices are low. The rapid growth of mining activities has put severe pressure on its power grid and even caused nationwide power shortages. In order to control energy consumption, the Kazakh government began to restrict the power quotas of Bitcoin mining companies in 2022 and intensified crackdowns on illegal mining farms. The country also introduced an electricity surcharge for cryptocurrency mining to reduce the impact on the power grid.
3. Iran
Iran is another important Bitcoin mining country, and its low-cost electricity attracts a large number of mining companies. However, Bitcoin mining is also considered one of the reasons for the country’s power supply shortages. In order to cope with the high electricity demand during the summer peak, the Iranian government implemented a temporary ban on Bitcoin mining during the electricity shortage period in the summer of 2021. By 2022, the Iranian government suspended mining activities again in an attempt to reduce the pressure on the power grid during the high electricity demand period and crack down on illegal mining farms.
4. Some states in the United States
Although the overall attitude of the United States towards Bitcoin mining is relatively relaxed and even welcoming, it is still a “loose” situation. Some states have taken stricter regulatory measures due to environmental and power resource allocation considerations. For example, New York State passed a bill in 2022 temporarily banning Bitcoin mining facilities that use fossil fuel energy in the state.
5. Other law enforcement actions
In recent years, some countries and regions have taken more severe law enforcement actions. For example, on August 21, 2024, Malaysian authorities destroyed over 900 Bitcoin mining machines in an operation against electricity theft; on May 27, Venezuelan authorities confiscated over 6,000 Bitcoin mining machines, with a total of 17,000 machines seized, and planned to cut off all Bitcoin mining farms; on May 26, Paraguayan authorities seized nearly 400 Bitcoin mining machines in the city of Sapucaí; on December 29, 2023, Indonesian regulatory authorities raided ten suspected electricity theft mining sites, confiscated 1,314 Bitcoin mining machines, and detained 26 people.
It can be seen that law enforcement related to Bitcoin mining is usually closely related to power pressure, electricity theft, and energy consumption. Therefore, to change the attitudes of governments towards Bitcoin mining globally, it is still necessary to start from energy and environmental protection. In fact, some countries have already started to alleviate the burden on the environment through environmental solutions and use this trend to promote economic growth, such as the United States and Russia.
Support for Bitcoin Mining in the US and Russia: Clean Energy
Why can the United States and Russia make Bitcoin mining a national strategy, and how do they solve the energy and environmental problems?
1. United States
Clean energy and technological innovation are the main means for them to solve the energy and environmental problems of Bitcoin mining.
Currently, some states in the United States have begun to adopt clean energy, such as Texas. The state not only has low electricity prices but also has abundant renewable energy, especially wind and solar energy. These clean energy sources not only allow miners to operate at relatively low costs but also reduce their reliance on fossil fuels for Bitcoin mining.
At the same time, many Bitcoin miners and companies in the United States have realized the importance of energy efficiency and have taken some technological innovation measures to improve mining efficiency. For example, using advanced cooling technology to reduce the energy consumption of mining equipment, establishing clean energy facilities near mining sites, and reducing environmental impacts through waste heat recovery. Some Bitcoin miners also offset their carbon footprints by purchasing carbon credits, such as investing in other sustainable projects (such as afforestation) to mitigate their environmental impact.
2. Russia
Abundant clean energy and favorable climate are the key factors for its large-scale introduction of Bitcoin mining.
The Siberian region of Russia has abundant hydro resources, which provides cheap and clean electricity supply for Bitcoin mining. The sparsely populated area leads to excess local energy supply, so the Russian government is also encouraging miners to utilize these resources to reduce energy waste. At the same time, the cold climate in Siberia helps to reduce the cooling costs of Bitcoin mining machines, making the mining process more efficient and environmentally friendly.
In terms of policies, Russia has enacted Bitcoin mining laws. The law sets clear and strict regulations and severe penalties for energy consumption to ensure that legitimate miners can use clean hydro resources without negatively impacting the energy needs of local residents. In addition, the government encourages the control of illegal mining farms through legal means and ensures that energy distribution during the mining process complies with regulations.
3. Other countries
Countries such as Canada and Norway have abundant hydro resources, and almost all of Iceland’s electricity comes from geothermal and hydroelectricity, while El Salvador is actively promoting the use of volcanic geothermal resources. These countries are using clean energy to reduce the environmental impact of Bitcoin mining and attract a large number of Bitcoin miners to settle in and contribute to their economic growth.
The First Step in Global Strategic Layout: Promoting Environmental Protection
In order to further promote the acceptance and development of global Bitcoin mining, especially in countries and regions with doubts about environmental protection, the first task of the global strategic layout is to promote environmental protection, which is also a key step for the sustainable development of the Bitcoin mining industry. Moreover, this process requires not only policy support from regulatory agencies but also active cooperation and practical technological innovation from miners and related companies.
Manco Law Firm believes that possibilities can be considered from the perspective of government agencies and miners and mining companies:
Government agencies.
As demonstrated by the actions of the United States and Russia in environmental protection and energy utilization, from the perspective of regulatory agencies, whether it is directly providing clean energy supply to Bitcoin miners, introducing incentive policies, or setting up carbon offset programs similar to carbon offset plans to promote mining companies’ investment in sustainable projects such as afforestation, all can promote Bitcoin miners to adopt clean energy and consider energy efficiency. In addition, through measures such as tax incentives and subsidies, the government can effectively guide miners to adopt more environmentally friendly technologies and reduce their reliance on traditional energy sources.
Miners and mining companies.
Whether to comply with environmental requirements from regulatory agencies or from the perspective of corporate social responsibility (ESG), actively adopting clean energy is a key step in solving environmental problems. At the same time, miners and companies should actively use technological innovation to improve energy efficiency. For example, using advanced cooling technology, establishing clean energy facilities near mining sites, and reducing environmental impacts through waste heat recovery. Some miners also choose to offset their carbon footprints by purchasing carbon credits, such as investing in other sustainable projects (such as afforestation) to mitigate their environmental impact.
In addition, government agencies and mining companies can consider jointly building clean energy infrastructure, such as establishing wind, solar, or hydroelectric facilities near Bitcoin mining sites, so that energy can be converted and used locally. This not only promotes the application of clean energy but also attracts more miners and companies to settle in, increasing the global share of the country’s Bitcoin hash rate. Based on these measures, countries can not only regulate the Bitcoin mining industry but also incorporate it into the country’s long-term energy strategy and carbon neutrality goals.
In conclusion, raising Bitcoin mining to the level of a national strategy is not only related to environmental protection and energy management but also closely related to technological innovation, economic development, and international competitiveness. Therefore, “promoting the development of the Bitcoin industry” relies not only on slogans or visions but also requires practical actions. From clear regulatory policies to practical energy utilization plans, to technological innovation, the sustainable development of Bitcoin mining requires comprehensive efforts and execution. Only by coordinating the environment with mining needs can countries truly promote the maturity and stability of the global Bitcoin mining industry.
