Away from talking about China’s reasons for the crackdown on BTC mining.
question 1: Why more than 50% of the miners are inside China?
Answer: Electricity prices in China are the cheapest in the world, and any global company or investing project wishes to establish their factories in China, so as to reduce the electricity costs.
It is worth mentioning that worldwide Bitcoin mining uses half of the electricity that a country like Egypt uses annually, and this is a huge number equal to a country’s annual consumption of electricity.
Question 2 : Has China warned about cryptocurrency and blockchain?
Answer: No, with the evidence that China invented the digital currency YAUN; indeed the idea is accepted by Chinese banks, and it is accepted by Chinese ATM machines. Hence China’s support for the blockchain feature through its digital currency.
Question 3: Is China’s ban on cryptocurrency beneficial or harmful?
Answer: Firstly, the effect on the prices of cryptocurrencies must be strong because China owns more than 50% of the global hash. Secondly, the Coindesk website indicates that the biggest change in the Bitcoin mining map since the beginning of Bitcoin mining, and if it is true; it means that there is a move of miners from China to other places. Also, many news websites said that the mining companies have transferred more than 3000 mining equipment from China to Kazakhstan, and the airlifting company was moving mining equipment to Maryland. all this news confirms the second point.
Since China owns more than 50% of the global hash value for Bitcoin mining; after the strong attack from the Chinese government on the miners and the cessation of mining hardware in China; it is very normal to watch a decline in BTC price and, accordingly, the rest of the cryptocurrencies. when the new devices are operating in other countries, the global hash begins to rise again. As a result, the price of BTC will start to rise and therefore digital currencies begin to rise too. This will not be in one country that has a monopoly of mining, and therefore we can actually see Bitcoin reach 100K USD.
There is also a point of view that says that China tried to control Bitcoin, but failed. This is based on previous tries to ban Bitcoin and mining in China but they could not. More than that, Chinese traders still trade on platforms, The government uses blockchain technology, and they launched the Chinese digital currency YUAN, furthermore.
Author: Ben LAHRICHI
Content writer, short story writer, and blogger