News hardware Bitcoin: a new country restricts crypto miners. Is this the end of BTC mining?
Published on 07/11/2022 at 18:45
For some time now, Bitcoin and other crypto miners have become a prime target for several governments. In a context of energy shortages and the greening of multiple sectors, the mining industry must comply with new requirements in certain countries. After China, the United States or the countries of the European Union, this country also intends to put pressure on BTC miners.
Bitcoin mining soon banned in this country
In the middle of crypto winter following the fall in the price of Bitcoin (BTC), the least we can say is that it is not good to be a crypto miner in this period. While some have been able to take advantage of Bitcoin’s rise in recent years to be profitable, since the crypto winter started, a majority of miners are almost at a loss. The cost of electricity production corresponds more or less to the current value of Bitcoin, that is to say, around 20,000€.
Nevertheless, crypto miners are not at the end of their surprises…
With a context of energy supply difficulties, the Canadian province of Quebec is thinking of putting a stop to cryptocurrency mining based on proof of work (PoW) on its territory. As a reminder, this type of mining used on the Bitcoin network, and other cryptos, massively consumes electricity. Indeed, by competing the computing power of a massive quantity of machines to validate transactions, the network is therefore very energy-intensive.
In this sense, the Minister of Economy and Innovation, Pierre Fitzgibbon, wants to cut off the electricity to Quebec crypto-mining professionals. It was through the social network Twitter that the politician clarified his intentions.
Concretely, the minister aims to establish a decree to subtract 270 MW (megawatts) of hydroelectricity used by cryptocurrency miners.
In his initiative, he is accompanied by the hydraulic renewable energy company, Hydro-Québec, one of the main electricity suppliers in Quebec. Thus, the company has undertaken to cut the 270 MW dedicated to crypto-miners with the aim of reinvesting them elsewhere. This categorical choice is explained by a forecast of an abundant demand for energy during the winter.
These measures are widely criticized by those concerned since Canada holds the title of second largest producer of hydroelectricity in the world, after China.
Towards the end of Bitcoin (BTC) mining?
Although bitcoin miners are increasingly using renewable energy, they are still targeted by governments, despite the revenue generated by the bitcoin mining industry.
Thus, the argument of energy scarcity seems to be ideal for restricting or even banning Bitcoin mining in the future.
Since China launched the initiative to ban mining on its territory more than a year ago, many governments have also begun to study the subject. In the United States, the White House recently published a report in which experts report on issues related to the crypto mining industry. This document aims to find greener solutions, but if this is not enough, stopping mining is possible.
On October 18, it was the turn of the European Commission to look into the matter. Through its action plan, the institution clearly mentions the restriction of proof-of-work cryptocurrencies, of which Bitcoin is a part.
Despite these recurring pressures, many believe that stopping mining is almost impossible, and for good reason, China still remains the leading mining power on the Bitcoin network after the ban.
However, if these measures are taken, then other cryptocurrencies could take Bitcoin’s place. Indeed, Ethereum, the second crypto in the ranking, now uses another much less energy-intensive validation system (proof of stake). As a result, crypto is a good student in the eyes of countries that want to take action on mining.