China is putting bitcoin and cryptocurrencies in trouble

Central and local authorities make life impossible for miners and users with constant bans and restrictions that have brought down the network's computing capacity and rating

photo: Pixabay China clamps down on damage again of bitcoin. Cascading central and local authorities are making the environment increasingly inhospitable for users and miners. Since the country hosts about 65% of the mining activities globally, the effect has repercussions on the sector's thermometers. Falling from nearly $ 41,000 a week ago, bitcoin's valuation is now hovering around $ 31-32,000 as the blockchain's hash rate (an indicator of processing power) has dropped to November levels (less than 90 Exa hashes per second). Yet, as soon as May 13, the global computing infrastructure had reached its all-time high of 171.4 Exa hash per second.

Miners are facing difficulties in all regions of China, regardless of whether their businesses are powered by coal, such as in Xinjiang and Inner Mongolia, or by hydroelectric power, such as Yunnan and Sichuan. Right there, on Friday, the authorities ordered the closure of 26 mining operations, asking electricity suppliers to cut connections to those plants within two days. Companies like Huobi Pool, Binance, and Antpool experienced a 20-40% hashrate drop within 24 hours, according to Global Times. The English-language news outlet supported by the Chinese Communist Party asserts the possibility that 90% of Chinese mining will be suspended, "at least in the short term".

One of the first provinces to close the farms was Inner Mongolia, which up to March was worth 8% of global mining. The United States has 7.2%, for comparison. The case of Sichuan now demonstrates that the Chinese authorities' disappointment with bitcoin does not depend only on energy consumption or pollution. The latest move was by the People's Bank of China, which on Monday convened payment services and major credit institutions, such as Alipay, the Bank of China for Industry and Commerce, the Bank of Agriculture. The "request" is to no longer provide users with any service related to the purchase or speculation of cryptocurrencies.

China has already banned initial coin offerings in 2017, initial money offers to launch new cryptocurrencies, also blocking the activity of local exchanges. However, this has not stopped people interested in buying cryptocurrencies, who have started turning to financial operators and then simply adding one more step to the process. In May, Beijing resumed its initiative to suffocate crypto, deemed dangerous for stability, financial order and the possibility of cross-border transactions with money laundering, banning any bitcoin transaction services. Now, the new squeeze aimed directly at credit and payment institutions.

Nonetheless, several influential social accounts in the crypto world have been closed on Weibo, a Twitter-like platform. Currently, many miners are considering leaving the country: favorite destinations could be places where energy is cheap such as Texas or Florida, Central Asia, the Middle East or Eastern Europe.


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Topics

Bitcoin China Cryptocurrencies Finance Fintech globalData.fldTopic = "Bitcoin, China, Cryptocurrencies , Finance, Fintech "

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