Does China want to eliminate Bitcoin mining? Why does the country with one of the largest Bitcoin mines in the world want to ban Bitcoin mining? Is the government putting too much pressure on the crypto sector in China?
China has the highest market for computer hardware, especially that which is designed specifically to mine Bitcoin as well as other cryptocurrencies. So now the big question is why China is planning to eliminate Bitcoin mining?. Let’s find out.
On Monday the 9th of April, the (NDRC) National Development and Reform Commission, made it known that it was considering or rather looking for the public’s opinion on a list of industries that it intends to eliminate, encourage or restrict. On a drafted list was crypto mining, which includes Bitcoin mining; a sector that is rather thriving industry with a lot of potential in China, among other industries for elimination as well. Reasons for the elimination of these include; not following rules and regulations, dangers production settings, pollution of the environment, wasting resources among other things that are said to be weighing on the country’s economy.
When will this banned take place and what are the implications?
The NDRC did not specify on the date the actual ban will take place; which can only mean that elimination was supposed to be immediate. Nevertheless, the document did mention that the deadline of the public to comment on the draft list is May 7th. However, this ban may have very little effect on Bitcoin mining in China.
On the bright side of this if China goes on to eliminate Bitcoin mining in may not be a complete loss. The elimination may promote decentralisation. Look at it this way; because the power of Bitcoin mining is centred mostly in China; several large mining pools were able to take over or merely undermine the whole network. Therefore, if China manages to eliminate Bitcoin mining; that would result in the BTC mining power spreading out all over the globe evenly.
China’s experience with cryptocurrencies thus far.
Since 2017 the relationship between China and cryptocurrencies has not been the prettiest. Throughout the past few years, China has been very aggressive towards the Bitcoin and cryptocurrency industry. The Cryptocurrency regulators in China Began to impose bans and eliminate local cryptocurrency and Bitcoin exchanges after 2017. Moreover, there were also limits on a lot of other cryptocurrency mining activities; which lead to large crypto companies leaving China.
Final thoughts – China to Eliminate Bitcoin Mining?
It is hard to believe that China, home to some of the world’s largest Bitcoin mining equipment manufacturers, is considering eliminating Bitcoin mining. Do I think they will go through with it? Who knows? I mean, right now it is merely a proposal that is set out for the public to comment; so it could go either way. Although, the ban would be a significant move it does not mean that Bitcoin is over. The price of Bitcoin went up recently over $5, 000 for the first time since the beginning of 2019.
Moreover, the first time Bitcoin price went over that price was back in 2017 regardless of the bad news that floated in China at that time. So let’s not conclude just yet. Nevertheless, we will keep you updated!