Bitcoin mining in China

mytechcrunch (62)in #btcrush • 7 years ago

The bitcoin ran up, too quickly to fall off.

Bitcoins are now being bad, due to such sudden price collapse, expensive fees, the emergence of rivals, and regulations in several countries. On the other hand, China is trying to eliminate bitcoin mining companies.

Mining is the process where bitcoin transactions blocks are verified. To perform this verification, it is necessary to perform complicated calculations with a powerful computer, and if we can solve it, we can get bitcoin as a reward.

Originally it was able to mine on a personal PC, but with the advent of hardware capable of doing huge calculations seven days a week, during the nine years since the birth of bitcoin, the trend of mining has come from individuals, specialized hardware, called ASICs. That spun in a cheap country of electricity bills. It is mainly China that meets the needs of these companies.

Another problem is related to the mechanism of the bitcoin itself. Immediately after the birth of a bitcoin, when one block was mined 50 BTC. However, due to 50% down in November 2012 and down by half in June of 2016, it is now 12.5 BTC, which is expected to be 6.25 BTC in June 2020.

In addition, the problem is more complicated by another function of the bitcoin. Calculations that thousands of ASICs doing lightly are also becoming increasingly difficult for every 2016 blocks.

Five years ago, investment for mining became less expensive for personal bitcoin mining enthusiasts. The cost of buying and operating the minimum necessary power for hardware mining is not balanced with the probability of calculating one block.

As China's hands are dedicated to mining, the huge amount of power consumed by the hardware used by professionals. It said to be consuming the electricity of one country of Denmark by just a bitcoin network. Given the profit going on, the margins that these companies can manage are very small and will disappear if this go as it is.

As soon as there are no miners to verify the transaction of bitcoins, the future of money stay as good as it is.