In news

China has broadened a crackdown on its massive cryptocurrency mining industry with a ban on mines in a key southwestern province.

Details

• Chinese mines power nearly 80% of the global trade in cryptocurrencies despite a domestic trading ban since 2017, but in recent months several provinces have ordered mines to close as Beijing turns a sharp eye to the industry.
• Cryptocurrency mining is big business in China, accounting for more than half of global Bitcoin production. 
• Authorities in the province of Sichuan ordered the closure of 26 mines last week, according to a notice widely circulated on Chinese social media and confirmed by a former bitcoin miner.
• The notice reportedly instructed power companies to stop supplying electricity to all cryptocurrency mines by Sunday. It vowed a “complete clean-up”.

Bitcoin Mining

Bitcoin mining is performed by high-powered computers that solve complex computational math problems; these problems are so complex that they cannot be solved by hand and are complicated enough to tax even incredibly powerful computers.

• Bitcoin mining is the process of creating new bitcoin by solving a computational puzzle.
• Bitcoin mining is necessary to maintain the ledger of transactions upon which bitcoin is based.
• Miners have become very sophisticated over the last several years using complex machinery to speed up mining operations.

Source: The Hindu