Michael Saylor of Microstrategy, who bet his company’s future on Bitcoin, shared his opinion, saying fans of the digital currency are very lucky regarding China Mining Ban.
The hashrate Bitcoin dropped by about 33% in the last 3 days, of 185 to 124 exahashes per second. A similar drop was seen last month when an incident in Xinjiang paralyzed mining farms in the region.
This time, the reason is that the government of China has issued a statement stating that it will increase the crackdown on activity.
Authorities asked citizens to report any cryptocurrency miner, noting that they sometimes ‘disguise’ themselves as data centers, benefiting from reduced taxes and energy prices.
The Bitcoin network, therefore, is currently functioning more slowly than normal due to this gradual disruption to mining, sometimes with only one block found in an hour, as opposed to the usual six.
As can be seen in the chart below, only one block was mined three hours ago and only three were found four hours ago.
Bitcoin does not depend on China
As always in this type of situation, the ‘problem’ is temporary and the network itself adjusts, but now it seems that Bitcoin will benefit better from the situation.
While Bitcoin is mined mainly in China, where coal plants are responsible for most of the energy generated, the cryptocurrency will remain “dirty” and will give fanatics ammunition for criticism.
In other words, with China fulfilling its promise to ban Bitcoin mining, critics will have one less lie to tell, and Bitcoin will continue to work the same way, however, with miners scattered in other parts of the world.
Currently, over 60% of Bitcoin mining is carried out in China, if the country just turns off all mining equipment, the cryptocurrency will continue to work with the rest of the miners, but there will be a period of up to 14 days for the network to adjust.
Michael Saylor of Microstrategy, who bet his company’s future on Bitcoin, shared his opinion, stating that fans of the digital currency are very lucky that China will ban mining activity:
Amid government repression, Huobi blocks miners, OKEx limits services to Chinese customers
According to journalist Colin Wu, who publishes relevant facts from China on the Twitter account Wu Blockchain, Huobi Pool, a subsidiary of Chinese broker Huobi, will no longer sell mining equipment or provide mining services to Bitcoin miners in China.
Huobi is an important broker for Chinese investors and it has the eighth largest mining pool in the world, with a 4% hashrate (mining power) of the entire Bitcoin network.
Thus, its exit from the market is bad for the network in the short term, but extremely positive in the long run, as it means that China’s influence in Bitcoin mining is falling.
OKEx, another Chinese giant, told Decrypt that it will also suspend some services to the Chinese on its P2P platform, starting this Monday (24).
The company did not explain the specific reason, but said to the site that it is committed to “regulatory compliance.”
The two companies are ceasing to offer services in China following restrictions imposed by the country’s government.