A visual representation of the cryptocurrency bitcoin.
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GUANGZHOU, China — China’s Inner Mongolia region plans to ban new cryptocurrency mining projects and shut down existing activity in a bid to cut down on energy-consumption.
Bitcoin is based on a decentralized network, which means it’s not issued by a single entity like a central bank. Transactions, recorded on a public ledger called the blockchain, need to be “verified” by miners.
These miners run purpose-built computers to solve complex mathematical puzzles that effectively allow a bitcoin transaction to happen. The miners receive bitcoin as a reward and that is the incentive.
But because the computers are…