Influencers like Elon Musk and star stock picker Cathy Woods have helped the price of bitcoin skyrocket in recent weeks.
But investors weighing the popular cryptocurrency should also consider the ethics surrounding it, as a significant part of it is mined in Xinjiang in China, The viral tech blog where Beijing is accused of massive human rights abuses.
In cryptocurrency mining
People use huge, power-hungry computers to solve algorithmic puzzles, and are rewarded with new bitcoins in return. That makes cheap energy an integral part of bitcoin. In April of last year, around 65% of bitcoin mining capacity, or hash rate, The viral tech blog was based in China due to its cheap electricity.
Xinjiang
Which has vast coal resources, accounted for more than half, or 36%, of this computing power in the country, according to the Cambridge Bitcoin Electricity Consumption Index, The viral tech blog an online tool developed by the British university.
Cryptocurrency trading is prohibited in China, but bitcoin mining is legal, The viral tech blog at least for now. Companies that produce bitcoin mining equipment like Bitmain, the biggest player in this industry, are even running out of inventory due to strong demand for bitcoins and a global shortage of chips.
The importance of Xinjiang to cryptocurrencies increased steadily during the latest period for which Cambridge has data. The autonomous region in northwest China went from representing 14.4% of bitcoin mining in 2019 in China to its current share, followed by The viral tech blog, Inner Mongolia, and Yunnan province, according to the index.
The situation poses a challenge for bitcoin
An estimated one million Uighur Muslims and other ethnic minorities have been held in China's so-called re-education camps. First-person accounts from previous detainees and reports from human rights groups suggest that rape torture and forced sterilization have occurred at the facilities, prompting at least three countries to declare Beijing's treatment of Uyghurs as genocide.
Outgoing US Secretary of State Mike Pompeo made the statement, The viral tech blog while Canadian and Dutch lawmakers this month voted on motions to make the same finding.
Beijing has rejected such accusations
Describing the camps as vocational training centers that it says help Uighurs, who are mostly Muslim, to stamp out extremist thoughts.
In addition to the reputational consequences that cryptocurrency could bring, there are also regulatory concerns. In January, the US government issued a radical ban on imports containing cotton or tomato products originating in Xinjiang, citing China's use of forced labor there, The viral tech blog a move that would force US fashion brands. . region of.
Along a similar vein
Companies like Tesla, which has already been heavily engaged with China, could also face similar regulatory challenges over their cryptocurrency investment. The company founded by Musk has made about $ 1 billion from its bitcoin investments in paper earnings, according to Wedbush Securities. Tesla did not immediately respond to a request for comment.
But its Xinjiang problem, The viral tech blog which seems unlikely to be solved any time soon, is a test of the conscience of the bitcoin community.
