Economy

China considers ban on bitcoin mining

China considers ban on bitcoin mining

In a stunning turn of events, China's National Development and Reform Commission (NDRC) is set to ban the bitcoin mining industry in the country. His take is that, while the ban is significant, it doesn't mean the end of Bitcoin, though it could affect coin production costs. China is now the dominant force in crypto mining hardware production with companies such as Bitmain controlling a large percentage of the industry.

"Half of the network is probably located in China", said Alex de Vries, a consultant with PwC in Amsterdam who specializes on blockchain and researches cryptocurrency mining. The new guidelines will get indecision to Chinese creators of crypto assets gears counting Bitmain Technologies. That said, Bitcoin mining is actually driving green-energy innovation. "It would also serve to kill the FUD that Bitcoin mining is centralized".

He added that most mining farms had access to cheap electricity, meaning they have access to public resources and has established connections with local governments. According to Reuters' sources, the Chinese government has been investigating these two companies' business models.

The government had previously announced its intention to clamp down on mining activities.

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China signaled its intent to ban cryptocurrency mining, dealing a fresh blow to an industry struggling with tumbling virtual currency prices, competition and waning investor interest.

Even though it is uncertain whether regulators will follow through with the claim to eliminate crypto mining activities, mining operators will most likely remain under tight regulatory oversight. In early 2018, regulators chose to lower the incentives for crypto mining without banning the practice entirely.

This is not the first time authorities have cracked down on cryptocurrency mining.

This is not to say that the big players are untouchable. It will be suggesting new laws that reflect crypto mining abilities which is not good capital and which will further add pollution. This drove a slew of crypto wallets and trading platforms overseas.