GETTY Chinese bitcoin miners still enjoy profits even if the cryptocurrency falls by 50%

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The mining procedure uses vast amounts of electricity, but even as China experiences its highest ever regulated electricity price of $0.13 per kilowatt-hour, miners are still in a position where the process is profitable. Mining is the processing of transactions in the digital currency system, in which the records of current bitcoin transactions, known as a block, are added to the record of past transactions, known as the blockchain. As long as the cryptocurrency is worth more than $6,925, miners will still make money, according to Sophie Lu, an analyst for Bloomberg New Energy Finance (BNEF). Bitcoin is currently worth $14,200 after rising 1,400 percent last year. The huge rise saw greater demand for electricity to run the computers used for mining.

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As cryptocurrency transactions need energy-intensive computer networks, the industry now uses as much power as 3.4million US households, say Digiconomist Bitcoin Energy Consumption Index. Electricity needed for bitcoin mining rose to 20.5 terawatt-hours a year by the end of 2017, said the BNEF. This is more than half the 38 terawatt-hours of electricity used annually by the world’s biggest miner, BHP Billiton. China hosts the largest community of bitcoin miners, still they only use 0.2 percent of the country’s annual electricity production. Mrs Lu detailed that due to the overcapacity of the power-generating sector, some companies would be able to negotiate rates as low as $0.03.