CryptoNews

China is blocking cryptocurrencies and dismantling mining farms

What will be the repercussions on cryptocurrencies in the global market?

China is having a problem with mining because the Chinese government is depriving miners not to continue with cryptocurrencies and due to this problem, miners are thinking of going to other countries to be able to continue mining the different cryptocurrencies or cryptocurrencies although At the moment, the Chinese who work with miners say that they are feeling a bit tight with the government’s decisions but that they are not yet being hanged by the situation.

However, these decisions are changing the life of Huobi that after the last decisions of the Chinese government is forced to change the strategy and seems to reveal an important trend for this segment. Because if miners from China move to other countries, it seems to suffer another drop in both Bitcoin and the other cryptocurrencies of the cryptocurrency market.

In China, it squeezes but does not drown

We have already commented on other occasions how the situation in China has two very different faces. The country has been prohibiting financial entities from providing facilities to operate with cryptocurrencies for some time, and recently an announcement was published in which that veto, already announced in 2013, was consolidated.

That was apparently one of the big reasons for the recent cryptocurrency declaration. In this new decline, it also seems to have had something to do with that apparent persecution of the miners operating in China.

On the other hand, this country is responsible for 65% of the production of Bitcoin worldwide, and what is really more feasible to be able to mine in this country of China is mining since the electricity there is very cheap, which makes that the profit margin for the miners is exceptional. It becomes a great advantage that electricity is lower in price than in other lands, being for the miners a great opportunity to be able to mine more and having a lower cost in electricity, however they are suffering from persecution because it is not against them. Allowing mining.

The world’s most popular cryptocurrency has plummeted.

The price of Bitcoin has fallen below $30,000 this Wednesday for the first time in three months, after China imposed new restrictions on cryptocurrencies.

The Asian giant on Tuesday banned financial institutions and companies from offering services related to cryptocurrency transactions.

He also warned investors against speculative cryptocurrency trading, something that sank the price of bitcoin by 20%.

China orders a halt to the industry

The Chinese government is carrying out a campaign to curb the Bitcoin mining industry, which is what that market calls the computers that make cryptocurrencies work, decentralized, approving transactions and creating new units. According to former cryptocurrency producers, energy providers in China’s Sichuan province were ordered to stop supplying electricity to those companies before Sunday. “This position is a new hard blow for the market,” said Timo Emden, an analyst specializing in cryptocurrencies. “The importance of China to the industry is now liable to decline rapidly,” he warned.

Until now, China has lived with the paradox of being one of the countries with the tightest controls on cryptocurrencies and at the same time becoming a ‘paradise’ for the growing number of bitcoin miners. However, since Beijing has redoubled its offensive against cryptocurrencies in recent weeks, the massive exodus of miners has become apparent and several countries appear in the pools (from Kazakhstan to the US passing through Eastern Europe) as a possible destination.

Although since 2013 China has increasingly restricted cryptocurrency operations, last May the People’s Bank of China, the country’s central bank, announced a ban on financial institutions to operate in them. The decision impacts from it to an already depleted bitcoin price. The Chinese authorities added measures on how to begin to carry out the main block on the internet search engines used in the country of Baidu, Sago, Zhihu or Weibo. So that they did not offer cryptocurrency exchange to citizens who tried to access the exchange houses, thus simultaneously the repression against mining has arrived.

Mining is the energy-intensive computing process by which new units of a cryptocurrency are created and which allows keeping a record of all transactions with existing tokens. In the case of Bitcoin, the competition has become fierce until it has become an entire industry. The high consumption of electricity required in the case of the main cryptocurrency has caused concern about its environmental impact to multiply while at the same time it has placed China, first power for its abundant and cheap energy.

Estimates collected to date suggest that between 65% and 75% of the world’s bitcoin mining occurs in China, mainly in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan and Yunnan. Sichuan and Yunnan’s hydropower make them meccas for renewable energy, while Xinjiang and Inner Mongolia are home to many of China’s coal plants.

The Chinese authorities, concerned about this, have decided to turn the situation around and accelerate regulatory pressure against mining, among other measures. The cut has already been palpable in Inner Mongolia. After failing to meet Beijing’s climate targets, the province’s leaders decided to give bitcoin miners two months to leave, explicitly blaming them for the area’s energy shortages.

What will be the repercussions on cryptocurrencies in the global market?

With the exit of mining farms in China, the difficulty of mining for the mining of different cryptocurrencies decreases and allowing other miners to obtain a greater amount of cryptocurrencies as a reward, but this is not only left here, China is blocking banking institutions and institutions of exchange that exchange cryptocurrencies, being the country with the greatest movements and demand for them, is causing a collapse in their prices, although this could be a measure of economic protection, cryptocurrencies cannot be easily controlled by governments of different countries, although they themselves They are already creating a series of legal frameworks to be able to control these markets and even collect taxes on them.

Manish Gehlot

I am a privacy, security, encryption and software freedom enthusiast. I am into VPNs, TLS security. Recently I also got into technical writings including guides.

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