China Proposes a Ban on Bitcoin Mining!

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In recent news, China’s National Development and Reform Commission (NDRC) has added Bitcoin mining to its draft list of industrial activities that the agency is seeking to stop. This list, however, is live since 2011, but only now they added proposals of cryptocurrency mining ban. This has started a massive FUD (Fear Uncertainty Doubt) on the price and future of Bitcoin since China accounts for almost 70% of Bitcoin mining hash rate.

Bitcoin mining wastes resources and pollutes the environment

The agency has ruled out this draft proposal to the public and asks for additional comments until May 7. It lists out thousands of industrial businesses in three categories: Promoting, Restricting and Eliminating. Cryptocurrency mining has been categorized as “business that is recommended to be eliminated” and is grouped with other activities that produce high levels of pollution. However, a Twitter user @DoveyWan who is considered to be a legit source of information eases everyone by saying that this is only a proposal and actual implementation could be “tens of years down the road”.

He refers to a similar list China released in 2011. The 2019 draft still contains many proposals from 2011. He points out that many of the proposals from 2011 still haven’t been eliminated today.

Additionally, the belief that Bitcoin mining pollutes the environment is not as bad as previously reported. A report from CoinShares in late 2018 states: “based on historical data on energy mix and locations of cryptocurrency mining operations in China, we have shown that contrary to the common narrative, the vast majority of global Bitcoin mining capacity (minimum 77.6%) is running on renewable energy.”

China mining

While this is only a draft proposal, it is worth mentioning that Bitcoin mining in China is the largest portion of Bitcoin mining as such in the whole world. According to CoinDesk approximates, China’s southwestern region could hold around one million mining machines.

Moreover, China is the home for many top crypto-mining pools such as: BTC.com (17,6%), AntPool (13,9%), F2Pool (9,8%), Poolin (8,9%), BTC.top (7,7%), ViaBTC (7,6%), Dpool (3,9%).

Circled mining pools are from China. Source: https://coin.dance/blocks/thisweek

Overall, China accounts for almost 70% of the Bitcoin hash rate.

Why China? China has one of the cheapest cost for electricity in the world. However, according to Anthony Pompliano, the companies and people of China “are investing more in mining today than ever before. And that doesn’t look like it will stop anytime soon.”

Not only about polluting the environment

As Anthony Pompliano writes, he thinks this is not only about Bitcoin being a massive threat to polluting environment. He refers to China as a “notorious government” which will ban everything that is not in their control. As we all know, China banned Facebook and Google due to a reason of centralization.

“..the government has prevented centralized, for-profit companies from entering the country. In this case, the government would be waging a battle against a decentralized network by attacking the infrastructure necessary to run the networks,”

writes Anthony Pompliano.

Moreover, Pompliano rules out numerous questions that asks for an answer in this particular situation:

“If they ban commercial mining activities, would they also ban individuals from running the Bitcoin software on their personal computers? Would they ban miners only if they are using non-renewable energy sources? Could miners continue only if they agree to pay high rates of tax or evolve their operations to become government-sponsored? What type of enforcement would be implemented if the recommendation was to discontinue mining activities?”

It sure looks like this issue has more questions than answers and this is still an open discussion until May 7.

Source:

Anthony Pompliano newsletter
https://www.reuters.com/article/us-china-cryptocurrency/china-says-it-wants-to-eliminate-bitcoin-mining-idUSKCN1RL0C4
https://www.buybitcoinworldwide.com/mining/pools/
https://coinshares.co.uk/wp-content/uploads/2018/11/Mining-Whitepaper-Final.pdf

Photo by Flickr.com

Could Ripple be the U.S. answer to China’s Bitcoin mining monopoly?

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China controls almost 80% of the Bitcoin mining and the majority of Ethereum mining today. That is a huge share if we look at it globally. And of course, it generates a competition between the strongest players in the world. China and the U.S. have been competing in trade wars since Donald Trump won the election. And now that is the direction that Ripple is looking. They have been in close contact with the White House and the Trump administration. Cory Johnson, Ripple’s chief marketing strategist, an ex-journalist had an interview with BREAKER magazine last week where he shared some inside information on the Ripple situation. He tried on dispelling the centralization rumor by saying that Ripple controls only 10 of 150 XRP validators, but didn’t provide any factual proof, and he confirmed that Ripple owns 60% of the coin supply. He says that because Ripple has created a cryptographic lock they cannot go and sell it all into the market. Johnson explained that Ripple has quarterly letters where they announce exactly how much have they sold and how that affects the value. 

Continuing on with questions about the White House, Johnson said that he was very surprised about the amount of knowledge that the White House representatives had: “When I started to meet with people in government and regulators, I had very low expectations. I have been truly amazed at the open-mindedness, number one. And number two, the smart questions, sometimes even tough questions. There’s clearly a lot of homework going on.”

Although it is not clear how the U.S. could be using Ripple in regards to a foreign control competition aspect, but one thing is clear – the U.S. White House administration is aware of the global cryptocurrency situation and they seem to think that Ripple could be the answer.

Johnson revealed that Ripple meets up with government regulators and politicians regularly, so we could be expecting a major Ripple implementation soon. Or on the other hand, the government is just starting to test various cryptocurrencies and seeks for a better use case. As he mentioned in the interview:

“I don’t know that the SEC wants to be in a position to have to comment on every single cryptocurrency or digital asset created and issue a ruling about it. I don’t know if they like what they did with bitcoin and Ether. I would guess that an administrative agency doesn’t want to take on regulating an entirely new part of the world when no one’s asked them to do it, and no one’s going to raise their budget for doing it.”

Could the future of the global crypto-situation turn out to be a competition between foreign affairs? Not so much, because China isn’t showing much appreciation towards Bitcoin and cryptocurrency mining. Having banned exchanges and ICOs in general, now they are looking towards mining farms, and the electricity they are using. That is the reason why most of the mining farms are expanding their headquarters to other countries like Canada and the U.S. China has a very low electricity price and in some places even free, so it is obvious why the country controls almost 80% of mining, but what is not clear is why China is pushing cryptocurrencies away from their domestic area? Are they just making it look that way? Could it be that China isn’t aware of the Bitcoin power they have? 

Source:

https://goo.gl/6GpcTF
https://goo.gl/iEvhjp

Photo by Canva.com

Baidu, Alibaba and Tencent are shutting down cryptocurrencies

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Baidu, the operator of China’s leading internet search engine, has shut down some of its popular cryptocurrency-related chat rooms, also known as Post Bar services, including “Digital Currency Bar” and “Virtual Currency Bar.” When visiting the web-pages of these chat rooms, it shows that they are temporarily closed “in accordance with relevant laws, regulations and policies.”

Meanwhile, Tencent and Alibaba have said that they are cracking down on any transactions related to cryptocurrencies on their mobile payment services.

Tencent said that the company will ban cryptocurrency trading on WeChat through measures including real-time monitoring of daily transactions and block suspicious transactions when necessary.

Also an Alibaba-controlled Ant Financial said that it will restrict or ban accounts on its internet-payment platform Alipay when they are found to involve cryptocurrency trades.

Both Alibaba and Tencent declined to specify how they monitor cryptocurrency trading. Alibaba is the owner of the South China Morning Post.

It looks like China is continuing its way to an all cryptocurrency ban, since September 2017, when they banned domestic exchanges and ICO’s. Earlier this month, Beijing’s central Chaoyang district issued a notice of banning hotels, office buildings and shopping malls in the area from hosting events which are promoting cryptocurrencies. And just recently censors shut down numerous cryptocurrency-focused news accounts on WeChat, including some owned by media start-ups that raised several million dollars in venture capital.

China, by any means, wants to forbid any kind of cryptocurrency rotation between its citizens, which isn’t that surprising, because it’s coming from a dictatorship country and they can regulate whatever they want.

Do you think China might change their position when cryptocurrencies become massively adopted?

Source:

https://goo.gl/CPVdfm