The recent news that the Chinese government is planning to crack down on the miners of cryptocurrency miners by limiting the amount of electricity they receive is about much more than the amount of energy which used during mining operations.

While a massive amount of electricity is used to mine bitcoins, the fact that China’s central bank has become involved suggests that power supply is not the only factor determining the government's response. Reports indicate that the Chinese government is planning to block any cryptocurrency platform which permits centralised trading in response to illegal activity.

Chinese authorities have already made moves to crack down on alt-coins such as Ticcoin and Onecoin. The government saw these cryptocurrencies as Ponzi schemes which were being used to raise illegal funds and eventually ordered that exchanges be shut down and that any fundraising via initial coin offerings (ICOs) would be prohibited.

In response to these moves, many Chinese based mining companies have relocated their operations overseas to Switzerland, Hong Kong, Amsterdam and Tel Aviv. However, the move to another country results in higher energy costs compared to China which makes mining inefficient and reduces profits. Until the issued raised by the illicit use of cryptocurrencies is addressed, it is likely that China will continue its war against the technology.