The cryptocurrency market has been on a downward slope since China’s plans to shut down domestic bitcoin mining operations in the country. The Chinese government’s move to clamp down on bitcoin had a negative effect on the cryptocurrency market, which started to tumble. In the future, bitcoin miners in China will find themselves with nowhere to go.
The price of bitcoin reached a new all-time high on Monday, reaching $3,500 on some exchanges. However, the cryptocurrency has been rising since its split into bitcoin and bitcoin cash last week, which has been accompanied by an increase in transaction fees. On Monday, the transaction fees reached over $3 per transaction, making small purchases uneconomical. (As of this writing, the average transaction fee on the network is $8.27.) Crypto miners in China have been affected by the higher transaction fees and are starting to move out of the country. In the past few weeks, mining operations have begun to move out of China to countries with cheaper electricity like Russia and Iceland. Two mining operations, BTC.TOP and ViaBTC
Chinese Bitcoin miners are shutting down their operations in China amid increasing pressure from the authorities. The Vice Premier of the People’s Republic of China, Zhang Gaoli, has called for a crackdown on illegal Bitcoin miners in an effort to “rectify the abnormal market.” The statement appears to have immediately had an effect on the industry, with the number of Bitcoin mining operations in China reportedly falling by 50 percent. Blog Post: Bitcoin miners are shutting down their operations in China amid increasing pressure from the authorities. The Vice Premier of the People’s Republic of China, Zhang Gaoli, has called for a crackdown on illegal Bitcoin miners in an effort to “rectify the abnormal market.” The statement appears to have immediately had an effect on the industry, with
Chinese bitcoin miners are trying to reschedule or scale back their operations after the latest wave of cryptocurrency fever launched by the government, according to a Reuters news report today.
End of surgery
This morning, cryptocurrency exchange Huobi suspended all mining operations (as well as trading services for Chinese users), BTC.TOP, a cryptocurrency mining pool, announced it was suspending its operations in China due to regulatory risks, and cryptominer HashCow said it would no longer buy bitcoin mining platforms. Huobi stops selling mining equipment and storage services to internal users pic.twitter.com/OHzipfrFdN – Joey Wong王祖兒 (@JoeyWong_t3ch) May 23, 2021 For the uninitiated, mining uses a huge computer system that performs millions of complex calculations per second to validate transactions on the Bitcoin network (a process known as proof of work). This requires an enormous amount of energy for maintenance, cooling and operation of the machines. But some argue that coal as an energy source and fossil fuel producers leave a large carbon footprint and seem to do little good for the world. And that, in turn, contradicts what China is trying to achieve as a country. Mining cryptocurrencies consumes a lot of energy, which runs counter to China’s carbon neutrality goals, says Chen Jiahe, head of investments at Beijing-based family office Novem Arcae Technologies. He added that the latest crackdown is part of the country’s efforts to end speculative trading in cryptocurrencies. The annual energy consumption of Chinese cryptocurrency miners is expected to peak at about 297 terawatt hours in 2024, according to the report. That’s more than Italy’s total electricity consumption in 2016, making this use a major concern for environmentalists and industrialists.
Bitcoin, mining and unconscionability in China
According to research, more than 75 percent of the bitcoin hashrate – a measure of the computing power per second used in mining – comes from Chinese organizations like F2Pool, Huobi and others. They have existed there for most of the past decade, as China’s favorable domestic climate, cheaper electricity and labor, and technological capabilities have proven conducive to the growth and flourishing of mining companies. However, Chinese officials are not so positive about this rapid growth. In statements last week, Deputy Prime Minister Liu He and the State Council said they would soon crack down on cryptocurrency trading and mining in the country. We will crack down on bitcoin mining and the behavior of traders and vigorously prevent individual risk from being transferred to the social sphere, officials said on Thursday, after which the market experienced a sharp sell-off within hours. Meanwhile, industry insiders say it is unlikely that mining in general will stop, as operators will simply move to cheaper locations or use alternative energy sources. But for Chinese miners, it’s another loss for the country: China will also eventually cede computing power for cryptocurrencies to overseas markets, Jiang, founder of BTC.TOP, said in a statement last week, referring to how China lost its position as an exchange hub for cryptocurrencies in 2017.
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This week, the Chinese Vice Premier Zhang Gaoli said that China will continue to curb bitcoin mining in the country in order to “prevent financial risks.” This is in response to the province of Anhui announcing a plan to set up new regulations on bitcoin mining, as well as to the central government’s ban on initial coin offerings (ICOs) and the trading of cryptocurrencies on exchanges. According to the People’s Daily, the government has shut down bitcoin mining operations in Sichuan, Guizhou, and elsewhere.. Read more about how much bitcoin does china own and let us know what you think.
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