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At the beginning of 2021, the Chinese government made many strong moves with the Bitcoin digital currency. Unlike previous campaigns, this time the Beijing government aimed at a seemingly safe activity – Bitcoin mining. Accordingly, localities have banned Bitcoin mining and trading activities. This has led many companies to move operations to other countries.
Currently, most of the world’s large-scale Bitcoin mining pools are based in China, or have founders from China. Before China’s ban, many companies have moved to other countries but servers are still in this country.
Before With China’s ban, the value of digital currencies has become much more “stable”, no longer being inflated by speculative activities. From mid-May to early July, the hash rate also more than halved.
It is likely that new blocks of transactions will appear in the near future due to a decrease in mining activity on the public network. Adjusted Bitcoin algorithm to ensure that mining productivity does not decrease. Miners outside of China are earning more Bitcoin than before, after the crackdown from the country’s government.
“Although the profit from mining decreases in the beginning because of the price of this coin, when the number of miners is low, the profits will return soon.” – blockchain company Glassnode analysis.
Many people think that the war between China and Bitcoin will bring many benefits in the long run. Previously, many experts were worried that with the large number of Bitcoin mining pools in the country, China would easily take advantage of Bitcoin, turning this currency into a “financial weapon”. But when it is no longer so concentrated in China, the currency will also be less affected by economic policy or political fluctuations.
Researchers from Princeton University and Florida International University published a paper in 2018 on “how China threatens the security, stability, and viability of Bitcoin.” The article also suggested that for political reasons China could attack the Bitcoin network. Maybe they will sabotage some transactions, censor certain Bitcoin addresses, or anonymize users and track their behavior.
With all the above reasons, this crackdown may make many miners in China difficult, but on the contrary, many big investors around the world will feel more comfortable.
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