The cryptocurrency mining industry of China accounts for more than half of global bitcoin production which has been virtually paralysed because of the sweeping ban on cryptocurrency mining by Chinese authorities.
According to reports, Chinese cryptocurrency miners are dumping their machines in despair or are trying to get refuge in places such as Texas or Kazakhstan.
"Many miners are exiting the business to comply with government policies," Mike Huang, operator of a cryptomining farm in the southwest province of Sichuan, was quoted as saying in a Reuters report. "Mining machines are selling like scrap metal."
A week ago, a ban on cryptomining was announced by the local government of Sichuan, the second largest bitcoin mining centre in China after Xinjiang.
In late May this year, the State Council, or cabinet of China announced its pledge to crack down on bitcoin trading and mining with the aim of avoiding any financial risks following revival of Chinese speculative trading in cryptocurrencies due to the global bitcoin mania. On the other hand, its own digital currency is being tested by China's central bank.
According to the allegations of the Chinese authorities, cryptocurrencies disrupt economic order while also facilitating illegal asset transfers and money laundering. The potential competition for the digital yuan and the potential threat to the environment because of excessive use of power for cryptomining were also causes of concern for HCinese authorities, say analysts.
Detailed measures to root out the cryptocurrency business have been announced by the main cryptocurrency mining hubs of China, including Inner Mongolia, Xinjiang, Yunnan and Sichuan, after the call to do so by Beijing,
This week the price of bitcoin has dropped by more than 50 per cent compared to the record high achieved earlier this year in April, to below $30,000 with worries among global investors about disruptions in a hitherto large market.
"If the government doesn't allow it (cryptomining), I just have to quit," Liu Hongfei, a mining project operator in China's south western Yunnan province, was quoted in the media as saying. "You don't fight the Communist Party in China, do you?"
According to an estimate by Adam James, a senior editor at OKEx Insights, up to 90 per cent of the all crypto mining in China could go offline because of the Chionese ban on bitcoin.
High-powered computers, or rigs, are used by bitcoin miners who compete to solve complex mathematical puzzles and this process makes use of huge amounts of electric power.
Nishant Sharma, founder of BlocksBridge Consulting, a consultancy focused on the cryptomining industry said that most miners in China are "shutting down their machines, and selling them".
Sharma said that due to the shutdown of crypto mining in China, "every mining operation outside China benefits straight away," since their rewards for mining, which is proportional to their share of the global hash rate of the bitcoin network which also denotes the processing power of miners, automatically goes up.
"This is the end of an era for cryptomining in China," said Winston Ma, NYU Law School adjunct professor.
(Source:www.livemint.com)
According to reports, Chinese cryptocurrency miners are dumping their machines in despair or are trying to get refuge in places such as Texas or Kazakhstan.
"Many miners are exiting the business to comply with government policies," Mike Huang, operator of a cryptomining farm in the southwest province of Sichuan, was quoted as saying in a Reuters report. "Mining machines are selling like scrap metal."
A week ago, a ban on cryptomining was announced by the local government of Sichuan, the second largest bitcoin mining centre in China after Xinjiang.
In late May this year, the State Council, or cabinet of China announced its pledge to crack down on bitcoin trading and mining with the aim of avoiding any financial risks following revival of Chinese speculative trading in cryptocurrencies due to the global bitcoin mania. On the other hand, its own digital currency is being tested by China's central bank.
According to the allegations of the Chinese authorities, cryptocurrencies disrupt economic order while also facilitating illegal asset transfers and money laundering. The potential competition for the digital yuan and the potential threat to the environment because of excessive use of power for cryptomining were also causes of concern for HCinese authorities, say analysts.
Detailed measures to root out the cryptocurrency business have been announced by the main cryptocurrency mining hubs of China, including Inner Mongolia, Xinjiang, Yunnan and Sichuan, after the call to do so by Beijing,
This week the price of bitcoin has dropped by more than 50 per cent compared to the record high achieved earlier this year in April, to below $30,000 with worries among global investors about disruptions in a hitherto large market.
"If the government doesn't allow it (cryptomining), I just have to quit," Liu Hongfei, a mining project operator in China's south western Yunnan province, was quoted in the media as saying. "You don't fight the Communist Party in China, do you?"
According to an estimate by Adam James, a senior editor at OKEx Insights, up to 90 per cent of the all crypto mining in China could go offline because of the Chionese ban on bitcoin.
High-powered computers, or rigs, are used by bitcoin miners who compete to solve complex mathematical puzzles and this process makes use of huge amounts of electric power.
Nishant Sharma, founder of BlocksBridge Consulting, a consultancy focused on the cryptomining industry said that most miners in China are "shutting down their machines, and selling them".
Sharma said that due to the shutdown of crypto mining in China, "every mining operation outside China benefits straight away," since their rewards for mining, which is proportional to their share of the global hash rate of the bitcoin network which also denotes the processing power of miners, automatically goes up.
"This is the end of an era for cryptomining in China," said Winston Ma, NYU Law School adjunct professor.
(Source:www.livemint.com)
