Cryptocurrency uses a lot of power.
Bitcoin miners need massive power supplies to perform dense mathematical computations that produce the currency. China allowed them to feed on its cheap electricity for several years, mainly in the provinces of Inner Mongolia, Xinjiang, Sichuan and Yunnan. China banned crypto exchanges 5 years ago and banned mining in June 2020. On Sept. 24, China’s central bank declared all transactions involving Bitcoin and other virtual currencies illegal. The Associated Press reported that Chinese officials were concerned that Bitcoin and other digital currencies disrupted the financial system and had become increasingly popular with money laundering rings.
Good reasons for banning mining are the massive power costs and greenhouse gas emissions, which are related. Electricity costs can represent more than half of the value of the coins produced. If you think about it, crypto mining is really just embezzlement. Miners take advantage of super low prices for power, convert that power to coins, and sell the coins internationally for a big profit.
Many worried foreign investors struggled to export expensive, delicate, massive computers out of China. Others and scouring the world for other places to set up. In its scramble to capture the Chinese business. Texas, South Dakota, Nebraska, North Carolina in the US are attractive markets for making Bitcoin. Miners have also moved their operations to Canada, Kazakhstan, Uzbekistan, Russia. Now Laos is taking on some big rivals.
Prime Minister Phankham Viphavanh announced last month that Laos would create and deal in Bitcoin, Ethereum and other blockchain-based currencies, making Laos the only Southeast Asian country to officially permit and participate in the web-based currency.
Mining, or “minting,” new Bitcoins involves constructing and operating huge linked computer “rigs” to determine a 64-digit hexadecimal “hash” number based on increasingly complex algorithms, essentially guessing trillions of possible random answers. By doing so, miners confirm Bitcoin and transactions are genuine and add them to the blockchain.
Mining requires massive amounts of power. Cheap power pitches rely heavily on ambitious dam-building projects as Laos heads towards becoming the battery of Asia and perhaps along with the Cryptocurrency Capital of Asia as well.