Recently, I saw someone discussing Bitcoin's energy consumption issues again, and it suddenly reminded me that this topic is indeed worth a good discussion.

A few years ago, Cambridge University conducted a study showing that the electricity consumption for Bitcoin mining had reached 134.89 terawatt-hours. If mining were considered a country, its energy usage would rank 27th in the world, equivalent to Malaysia's entire annual electricity consumption. This number is truly astonishing, but to understand why this is the case, we first need to clarify what mining actually involves.

In simple terms, virtual mining is using computers to calculate and obtain Bitcoin. In the early days, Satoshi Nakamoto mined 50 Bitcoins with a home computer, consuming very little electricity. But as more and more people joined in, the situation changed completely.

Bitcoin's issuance mechanism determines all of this. The system is set to have a total of 21 million Bitcoins, and miners receive rewards for discovering a block. Initially, the reward was 50 Bitcoins, but after every 210k blocks, the reward halves. This means that mining difficulty is constantly increasing. A single computer that could mine Bitcoin in one day later needed two computers working for two days, then four computers working for four days. The difficulty of mining doubles, and naturally, the electricity consumption doubles as well.

As the owner of a mining farm, the only way to survive this competition is to continuously upgrade equipment, purchase more and faster mining machines. A single mining machine consumes about 35 kWh, and a mining farm's daily electricity consumption can even meet a person's entire year's electricity needs. Besides the power used to operate the hard drives, the heat generated during operation can cause the farm to shut down, so additional power is needed for power fans and chassis fans, which further increases electricity consumption.

So, are the Bitcoins mined with such hard work and huge electricity resources worth anything? My personal view is that Bitcoin itself has little practical value. It was born during the 2008 subprime mortgage crisis, when the Federal Reserve kept printing money to respond to the crisis, causing the US dollar to depreciate continuously. Satoshi Nakamoto attempted to challenge dollar hegemony with electronic currency, which is an interesting initial idea.

Early Bitcoin circulated among programmers, and some even exchanged 1,000 Bitcoins for two pizzas. Later, as its popularity soared, the price skyrocketed in a surreal manner. In 2020, after the Federal Reserve again flooded the market with liquidity, Bitcoin broke through $68,000. But this has completely diverged from Nakamoto's original concept. From a labor theory of value perspective, Bitcoin has no real value because human society doesn't need it; it's not a necessity. The mining process can't be measured by traditional labor. Ultimately, Bitcoin has always been outside the commodity circulation system, and its current high price is just a bubble created by speculation.

If Bitcoin has any value, it might be because of its decentralization and anonymity features. But once it returns to the essence of currency, it will inevitably face being squeezed out by mainstream currencies. So, the greatest value of Bitcoin is probably the electricity wasted during mining and the bills for the mining machines.

This is also why my country has decided to crack down on Bitcoin. First, because of energy consumption—the electricity used for mining will only increase. Reports indicate that before May 2021, nearly 70% of global Bitcoin mining farms were in China. Miners would buy cheap hydropower in Yunnan, Guizhou, and Sichuan during the flood season, then switch to thermal power in Inner Mongolia and Xinjiang during the dry season. Some predict that by 2024, Bitcoin mining in China will consume electricity equivalent to three Gorges Dam's annual output. This puts enormous pressure on the country's economic development.

Second, Bitcoin's anonymity makes it a natural shield for money laundering, drug trafficking, and scams. To combat black markets, the first step is to cut off Bitcoin's transmission chain.

Most importantly, it is about safeguarding monetary sovereignty. In times of economic turmoil, Bitcoin can significantly increase financial risks for countries and even the world. The example of El Salvador is very illustrative: this small Central American country adopted Bitcoin as legal tender in September 2021, but a major bear market caused it to lose millions of dollars. Some even say it could become the first country to go bankrupt due to cryptocurrency speculation.

Honestly, whether for the country or individuals, speculating on cryptocurrencies is essentially no different from gambling. It erodes people's spirit and consumes the diligent virtues of a nation. Our country is firmly cracking down on Bitcoin speculation, and this decision is undoubtedly wise.