How the China Bitcoin Mining Ban Serves to Silence Crypto Naysayers
If you check out practically any crypto news publication recently, you will see at least one story detailing the recent news that the Chinese federal government is thinking about a blanket restriction on Bitcoin mining. Perhaps a testament to the world superpower’s repeated clampdowns on different elements of digital currencies (exchanges and ICOs, in recent memory), the price of Bitcoin seems mostly untouched by the news.
What is more fascinating than the nation’s possible clampdown, or perhaps the price’s little acknowledgement of it, is the reality that a restriction on Chinese mining for Bitcoin might actually be beneficial to the cryptocurrency. Two of the most typically duplicated critiques of Bitcoin is that mining is too centralised in China and that it relies far too heavily on dirty energy from fossil fuels, a Chinese ban might effectively change this.
Could China’s Bitcoin Clampdown Actually Be Good For Crypto?
As you most likely know by now, the nation of China is thinking about a restriction on crypto mining. The activity has actually been committed to a list of industries, initially compiled in 2011, that the National Development and Reform Commission looks for to limit or phase out. The thinking for the elimination of such industries, according to a report in Reuters, is based on public security, the volume of resources consumed by the particular activity, and just how much it contaminated the environment.
Although no word has actually been provided about how the Chinese government intends to enact such a restriction or even when it would start, the public has actually been given till May 7 to make comments about the proposed modifications.
Of course, this is not the first time the government of China has flexed its muscles in the direction of crypto. In fact, the world superpower has had such an on-again, off-again policy towards the space that much of the cryptocurrency community has reacted with indifference to the news – as evidenced by the Tweet below:
“China says it wants to eliminate bitcoin mining”#Bitcoin Fud pic.twitter.com/t11kNWD695
— WhalePanda (@WhalePanda) April 9, 2019
In previous examples, when China has actually developed seemingly harsh policies regarding the industry, the Bitcoin price and that of other digital assets have actually seen dramatic relocations downwards. For instance, when the nation prohibited its citizens from purchasing ICOs during September 2017, the price was hit hard momentarily. This was not the case this time and Bitcoin is currently close to the most valuable its been all year, thanks to the current surge in price
What ought to prove interesting moving forward, if China is assuredly able to enforce a restriction with efficacy, is how it will change both the ecological impact of Bitcoin mining and how decentralised mining efforts are.
Typically, Bitcoin has actually been attacked on the grounds that large classes of mining operations are based in China. This, for Bitcoin’s naysayers, is a weakness in the network’s security since such a big percentage of the networks hash power is focused in a single geographical area. The rationale is that these miners would be much easier to persuade into acting in tandem in methods damaging to the network than if they were spread more very finely around the world.
The latest news out of China could well serve to further distribute hash rate and thus strengthen the network. This would ultimately be a positive development for Bitcoin generally and may directly answer one of Bitcoin’s most repeated criticisms.
That is not all though. The China ban could wind up resolving a second of the concerns many have with Bitcoin, its reliance on non-renewable energy to power mining operations. Currently, miners have looked for locations such as Canada and Iceland to utilize the plentiful, inexpensive, neat electrical power supplied by geothermal and hydroelectric plants.
Nevertheless, lots of operations continue to be based in China where they commonly rely on nonrenewable fuel sources. Being removed out of the country, where such power is reasonably inexpensive, a ban will likely drive more miners to check out locations where eco-friendly power is cheap and plentiful.
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