Recently, I saw someone discussing Bitcoin mining again, which reminded me that this topic is indeed worth a good discussion.

First, some data: In 2021, a study by Cambridge University showed that Bitcoin mining's electricity consumption had reached 134.89 terawatt-hours. If it were a country, its electricity usage would rank in the top 30 globally, equivalent to Malaysia's entire annual electricity consumption. Sounds a bit shocking, right?

So why does mining consume so much electricity? Basically, it's because the difficulty keeps increasing. In the beginning, Satoshi Nakamoto could mine 50 Bitcoins with a home computer, but as more people entered the space, the system was designed to make mining more and more difficult. The total supply of Bitcoin is capped at 21 million coins, and every 210k blocks mined, the reward halves. This mechanism forces miners to constantly upgrade their equipment and buy faster mining machines to stay competitive. As a result, electricity consumption multiplies. A single mining rig consumes about 35 degrees Celsius worth of power daily, and a mining farm's daily electricity use is enough for an average person’s entire lifetime.

At this point, many people ask: Is Bitcoin worth this much electricity consumption? That’s a good question. Bitcoin was born during the 2008 financial crisis, when the Federal Reserve kept printing money, and the dollar was devalued as a given. Satoshi Nakamoto aimed to challenge this system with a decentralized digital currency, which was quite an attractive idea at the time. In the early days, there was even a story in tech circles about buying a pizza with 1,000 Bitcoins—that was a niche thing back then.

But now? Bitcoin has long since diverged from its original monetary purpose. From a labor theory of value perspective, it has no real backing; it’s just a bubble created by speculation. In 2020, the Fed’s continued money printing caused Bitcoin’s price to surge past $60k. But these gains are built on speculation. Its current value is more driven by features like decentralization and anonymity, but these same features also make it a hotbed for money laundering and black market transactions.

This helps explain why China has been resolutely cracking down on Bitcoin speculation. On one hand, it’s about energy consumption. Before 2021, nearly 70% of global mining farms were in China. Miners would compete for cheap hydropower during flood season, then buy coal-fired electricity in Inner Mongolia and Xinjiang during dry seasons. It’s predicted that by 2024, Bitcoin mining in China will consume as much electricity as 3.5 Three Gorges Dam projects annually. That’s a huge waste of resources for economic development.

On the other hand, Bitcoin’s inherent anonymity makes it a tool for illegal capital flows. Money laundering, drug trafficking, scams—all can be facilitated through it, posing real threats to financial security.

Most critically, there’s the issue of monetary sovereignty. In 2021, El Salvador made Bitcoin legal tender, but during this year’s bear market, the country suffered losses of over tens of millions of dollars. Some even say it might become the first country to go bankrupt due to “speculating on cryptocurrencies.” What does this case tell us? It shows that the risks of “crypto trading” are no less than gambling; it can destroy a country’s financial stability.

From this perspective—considering energy waste, crime risks, and financial security—China’s firm stance on cracking down on Bitcoin mining and speculation is indeed a wise decision. It’s not just simple policy suppression but a move to protect the country’s economy and the property safety of ordinary people.