CoinWorld reports:
Whether in China or globally, the core issue for accepting or even promoting Bitcoin (BTC) mining lies in “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 defines the future, I hope it will 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 a focus of the market. According to an investor report released by Morgan Stanley analyst 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 election enters the final countdown in October, whether Trump can successfully win the election directly affects the Bitcoin (BTC) market. Reports have suggested that if Trump wins, the price of Bitcoin may experience a major surge.
* Image source: Voting situation in various states of the United States on October 23
In addition to the US election, the latest positive news regarding Bitcoin mining globally is the effective Bitcoin mining law in Russia, which is expected to enhance Russia’s position in Bitcoin hash rate. Previously, Manco Law Firm also published several articles, such as “Web3 Lawyer: How to View the United States’ Purchase of 1 Million Bitcoins as National Reserves?”, “Bitcoin Welcomes “Made in America”, Cryptocurrency Mining Becomes a New Focus of Great Power Competition”, and “Web3 Lawyer: Russia Passes Cryptocurrency Mining Act, Is BTC Mining Officially Legal?”, analyzing the important position of Bitcoin reserves and mining industry.
However, whether in China or globally, the core issue for accepting or even promoting Bitcoin (BTC) mining lies in “how to solve environmental and energy problems”.
The Seven Sins of Bitcoin Mining: Lack of Environmental Friendliness
Restrictions on Bitcoin mining can be considered a global trend in recent years, with China’s regulatory policies being the most typical.
1. China
China used to be the absolute center of global Bitcoin mining, with nearly 75% of the global hash rate. However, the “Notice on Rectifying Virtual Currency ‘Mining’ Activities” issued in 2021 by the National Development and Reform Commission and other departments pointed out that Bitcoin mining has caused energy waste, especially in energy-consuming provinces such as Inner Mongolia and Sichuan. Its high power consumption is contrary to China’s carbon neutrality goals, making Bitcoin mining the first target to be cracked down on. Against this background, domestic miners have flocked to overseas mining. However, according to a report by Web3 well-known media Bitcoin Magazine titled “China Never Banned Bitcoin Mining”, China’s Bitcoin mining hash rate has only been “cleared” once in 2021, and it has since recovered. Currently, the mainland China hash rate is second only to the United States globally.
2. Kazakhstan
After the ban in China was implemented, a large number of miners moved to Kazakhstan, where there is relatively abundant energy and low electricity prices. The rapid growth of mining activities has put severe pressure on its power grid, leading to a nationwide power shortage. In order to control energy consumption, the Kazakh government started to restrict the power quota for Bitcoin mining companies in 2022 and increased efforts to crack down 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, attracting a large number of mining companies due to its low-cost electricity. However, Bitcoin mining is also considered one of the reasons for the country’s power shortage. In order to cope with the peak power consumption in summer, the Iranian government implemented a temporary ban on Bitcoin mining during the electricity shortage in summer since 2021. By 2022, the Iranian government suspended mining activities again in an attempt to reduce the pressure on the power grid during peak power consumption, while cracking down on illegal mining farms.
4. Some US states
Although the United States as a whole has a relatively lenient and even welcoming attitude towards Bitcoin mining, regulation measures in some states have become stricter due to environmental and power resource considerations. For example, New York State passed a bill in 2022 temporarily banning Bitcoin mining facilities that use fossil fuel energy.
5. Other law enforcement actions
In recent years, some countries and regions have taken more stringent law enforcement actions. For example, on August 21, 2024, Malaysian authorities destroyed over 900 Bitcoin mining machines in an anti-electricity theft operation; on May 27, Venezuelan authorities confiscated over 6,000 Bitcoin mining machines, with a total seizure of 17,000, and planned to cut off all Bitcoin mining farms; on May 26, Paraguayan authorities seized nearly 400 Bitcoin mining machines in Sapucai; 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 linked to power pressure, electricity theft, and energy consumption. Therefore, in order to change the attitudes of governments towards Bitcoin mining globally, it is still necessary to start with energy and environmental protection. In fact, some countries have already begun to alleviate the burden on the environment through environmentally friendly solutions and use this trend to promote economic growth, such as the United States and Russia.
US and Russia Support Bitcoin Mining: Clean Energy
Why can the United States and Russia treat Bitcoin mining as a national strategy? How do they solve the energy and environmental problems?
1. United States
Clean energy and technological innovation are the main means for the United States to solve the energy and environmental problems of Bitcoin mining.
Currently, some states in the United States have started to adopt clean energy, such as Texas. Texas not only has low electricity prices but also has a large amount of renewable energy, especially wind and solar energy. These types of clean energy can allow miners to operate at relatively low costs and reduce the 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 have also adopted the approach of purchasing carbon credits to offset their carbon footprint, such as investing in other sustainable projects like afforestation to compensate for their environmental impact.
2. Russia
Abundant clean energy and favorable climate are the key factors for Russia’s 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. Moreover, the sparsely populated areas result in surplus energy supply, so the Russian government encourages miners to utilize these resources to reduce energy waste. Additionally, the cold climate in Siberia helps to lower the cooling costs of Bitcoin mining machines, making the mining process more efficient and environmentally friendly.
In terms of policies, Russia has implemented Bitcoin mining laws. The law sets clear and strict regulatory requirements and severe penalties for energy consumption to ensure that lawful miners can use clean hydroelectric resources without negatively affecting the energy needs of local residents. In addition, the government encourages the control of illegal mining farms through legal means and ensures compliance with energy distribution during the mining process.
3. Other countries
Countries such as Canada and Norway have abundant hydro resources, while Iceland relies almost entirely on geothermal and hydroelectric power. El Salvador is actively promoting the use of volcanic geothermal resources. These countries are all reducing the environmental impact of Bitcoin mining through clean energy, attracting a large number of Bitcoin miners and contributing to their own economic growth.
First Step in Global Strategic Layout: Promoting Environmental Protection
In order to further promote the acceptance and development of Bitcoin mining globally, especially in countries and regions with doubts about environmental protection, the first task of the global strategic layout is to promote environmental protection. This is also a crucial 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 innovations from miners and related companies.
Manco Law Firm believes that possibilities can be considered from the perspective of government agencies and miners/mining companies:
Government agencies:
As demonstrated by the actions of the United States and Russia in terms of environmental protection and energy utilization, regulatory agencies can promote Bitcoin miners’ use of clean energy by directly providing clean energy supply, issuing incentive policies, or setting up similar carbon offset programs to encourage miners to invest in sustainable projects such as afforestation to reduce their reliance on traditional energy sources.
Miners/mining companies:
Whether to meet the environmental requirements of regulatory agencies or from the perspective of corporate social responsibility (ESG), actively adopting clean energy is a key step in addressing environmental issues. 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, exploring more efficient mining algorithms to reduce power consumption. Mining companies can also choose to establish mining pools in areas with surplus electricity and give back the thermal energy generated during the mining process to society, assisting the government in solving energy consumption issues and achieving win-win results.
In addition, governments and mining companies can consider jointly building clean energy infrastructure, such as wind, solar, or hydroelectric facilities near Bitcoin mining sites, to enable energy conversion and utilization locally. This not only promotes the application of clean energy but also attracts more miners and mining companies to settle in, increasing the global share of the country’s Bitcoin hash rate. With these measures, countries can not only regulate the Bitcoin mining industry but also incorporate it into their long-term energy strategies and carbon neutrality goals.
In conclusion, elevating Bitcoin mining to the level of a national strategy is not only about 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 on practical actions. From clear regulatory policies to practical energy utilization solutions and technological innovation, the sustainable development of Bitcoin mining requires comprehensive efforts and execution. Only by coordinating the environment and mining needs can countries truly promote the maturity and stability of the global Bitcoin mining industry.
