They are extracted from the earth by humans.
Minerals are extracted in China because it has one of the largest reserves of rare earth elements (REEs) in the world.
China’s energy is consumed by Bitcoin mining
China has low-cost electricity and many hydroelectric plants. There are also many mining facilities in China. Mining pools are great for Bitcoin miners who want to find a block but do not want to work alone. The Chinese government does not look favourably on Bitcoin mining because it consumes a lot of energy, especially from coal-fired plants and nuclear power stations such as those in Xinjiang province, where more than half of Bitcoin mining operations are located (and where most mining activity takes place at night, when air pollution levels are lower).
In reality, I think we should be concerned about this whole situation, because if bitcoin continues along its current trajectory, we could see a scenario in which there is too much demand, which would mean higher prices and less supply or, worse still, if it stops being profitable, perhaps nobody will mine it any more?
There is a surplus of energy in the country, but it cannot be used
In China there is a surplus of energy. There are many hydroelectric plants in the country, but the energy cannot be used because there are no transmission lines to carry the electricity.
Hydroelectric plants are very large and produce a lot of energy. The problem is that the plant is far from where the electricity is needed and nobody wants to build another transmission line that could cost millions of dollars. This has contributed to power outages.
Hydroelectric plants will continue to produce more energy
Hydroelectric power is a renewable energy source and, as such, is much cheaper than other types of electricity generation. Hydroelectric plants produce electricity 24 hours a day, 7 days a week. Because these plants can produce power steadily, they can be used to help balance the grid when demand is high or low. This makes hydroelectric power an ideal form of energy for the bitcoin network, which needs upward stability to maintain its operations.
Because hydroelectric power is so reliable, it will continue to be used as an economical solution for producing clean energy, even though its costs are higher than those of other sources such as wind turbines and solar panels (which we will discuss later).
Mining has become a common practice in China:
Bitmain, the largest manufacturer of Bitcoin mining equipment, is based in China. The country has an energy surplus and low electricity costs, and Bitcoin mining is one of the uses of this energy. In fact, China accounts for the majority of global Bitcoin production that is traded on exchanges such as CoinMarketCap or Binance.
Bitcoin must evolve and, thanks to blockchain technology, it can no longer be improved.
As we can see, Bitcoin is not sustainable in its current form. Blockchain technology could help change the situation by creating a more efficient system for processing transactions. But until the technology evolves and becomes more accessible, Bitcoin will remain an inefficient method of payment.
However, despite its shortcomings and high production costs, many companies use bitcoin as their main currency (for example, large web companies too). The cryptocurrency has been around since 2009 and shows no sign of disappearing any time soon.
Conclusions
The energy consumption of cryptocurrency mining is a major problem for the world, but it is beneficial to China’s economic development, even though its production is opposed by the central government as well. It is inevitable that all this will have an impact on the environment and on geopolitics.
