🔨 China Likely to Start Crackdown on Bitcoin Mining

What's going on: China and Cryptocurrencies: a lovestory that doesn't seem to happen anytime soon. After the government officially ordered local crypto exchanges to shut down and banned ICOs last year, they are now readying a massive blow against crypto mining operations in the country.

It seems that the government doesn't want miners to keep exploiting cheap energy cost from coal powerplants. In leaked documents finance regulators are said to have initiated a final and severe clampdown on cryptocurrencies. It basically says that Bitcoin miners must make an “orderly exit” from China because they have consumed “huge amounts of resources and stoked speculation.”

What's interesting is, that in some areas mining businesses have partnered with local governments to ensure a steady supply of electricity at discounted rates, with a portion of the profits returned to the local authorities. That’s offered a welcome economic boost in regions where more traditional industries are struggling. But this doesn't seem to be a sustainable operation. Now China is dissolving any such agreements and deals that had previously been struck.

Why should I care: It's true that the market was able to handle the actions taken so far, and it is also true that there is a pretty popular investment advice, that one should invest in the things the Chinese are banning. But: Three-quarters of all Bitcoin mining is done in China. Plus the most popular hardware used around the globe is produced there (like the products from Bitmain for example).

Perhaps wary of additional regulation, China’s bitcoin mining giants have already branched out to open new facilities in countries like Iceland, Canada and the U.S. Nonetheless, a serious move to crush the mining industry has the potential to impact bitcoin.

Source: techcrunch.com, twitter.com
GIF: giphy.com

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