Looking Back at the Chinese Crypto Ban

Looking Back at the Chinese Crypto Ban

By Cje95 | Chronic Illness and Crypto | 14 Oct 2021


Today as I was waiting for someone with a key to come let me into the Congressional Office I flipped through the Financial News newspaper to see if anything, in particular, caught my attention. To my surprise, they actually had a small piece published on the front page of the paper about the US taking the Bitcoin lead. As we all know by now China has banned crypto mining in the country and cryptocurrency overall and has labeled any activity with crypto as being illegal. 

 

China used to have a dominance in the hashrate mining game often providing around 60-65% of the network's mining power. While this has been slowly eroding and with China the last year becoming increasingly hostile to Bitcoin and other cryptos the outright ban occurred when there was still over 40% of the hashrate provided by the country. 

 

One of the first things that occurred as these miners shut off and scrambled to move outside the country was that the mining difficulty fell off a cliff and "out of date" miners that had stopped being profitable were profitable again. Naturally, this only lasted a few weeks but the rest of the world's miners got a huge boost in mining rewards. These companies like Marathon Digital Holdings have admitted that they know it was a one off occurrence but mentioned how beneficial it was. 

 

Offically China has 0% of the hashrate mining power now and two countries in particular benefited the this huge shift. The most obvious one that a lot of people know about it the United States with Texas and New York reaping the majority of the rewards of miners moving to the US. The jump has surprised me as it has increased by 17% to 35% of the total mining power. The other country that I had heard rumors about attracting Chinease miners was Kazakhstan which gained 10% for a total of 18% of the total mining power. 

 

I believe that this could be one of the best things that could have happened to blockchain since Bitcoin was the biggest name in the game. The relocation of miners across the world is an important step in developing a stable truly independent cryptocurrency. Since the majority of the minning power is not concentrated in one country or one region of the world this helps alleviate fears that the blockchain could be hijacked by a country or some other narfarious actor. With the diplomatic and economic row between China and the US seeming to have no end in sight the abandonment of Bitcoin allows US investors and investors across the world really to feel much safer in buying Bitcoin as it will not be coming from China. 

 

It will be interesting to see how the hashrate continues to develop with more companies focusing on renewables and countries like El Salvador mining their own Bitcoin for their countries reserve. It will be important that a country or a few countries in the East continue to be pretty big players in mining so that it does not transition to a Western thing and maintains its neutrality! Please know that I am not a financial advisor I am just a guy writing about the news! 

 

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Cje95
Cje95

Graduated from Texas A&M in May of 2020 had dabbled in crypto since 2017 but dove in at the end of 2019. December of 2020 packed up and moved to D.C. and shares my growing pains with y’all here! Huge sports fan, space nerd, and international news reader!


Chronic Illness and Crypto
Chronic Illness and Crypto

Cryptocurrency and Blockchain are going to be a huge part of the future and no matter who tries it isn't going to be stopped! Here I try to give my best insight and thoughts into the latest crypto news, features, developments. Further, I look to discover any link to news from the United States ranging from social-political issues to stock market and economic data.

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