The news of the closure of a BTC mining farm in Sichuan, China has landed. Is it good or bad for BTC?
As the saying goes, "All the advantages are good." Then, as the news of China's closure of BTC mining farms is implemented, what will be the next step for BTC. In my last article, I pointed out that China’s closure of BTC mines is bad news for BTC. However, many netizens believe that China’s closure of BTC mines is good news for BTC and is conducive to the better development of BTC. It is reasonable but not clear. I have summarized three representative points. Let’s discuss them today.
Among them, David Marcus, the person in charge of Facebook's payment system, put forward a very representative point of view. He thinks it is a good thing that the main force of BTC mining is transferred to Western countries. In fact, this view is also the most difficult to refute, because it is difficult to determine the attitude of Western countries towards BTC, and policy is an important element that determines the direction of BTC. If the main force of BTC mining is transferred to Western countries, most of the BTC that has not been mined will be controlled by them. This involves the relationship of interest. Everyone wants to increase the value of BTC in their hands, which is easy to form a new alliance of interests in BTC.
The closure of China’s BTC mines affects mining efficiency and will increase the price of BTC?
Someone once said that "the strongest fortress is often disintegrated from the inside." If BTC wants to continue to develop, it needs to constantly have new members to join. Because the profit model of BTC is similar to the money of those who enter the market first, and those who enter the market after earning. As the price of BTC rises, the risk of holding coins for later entry holders will increase, and no one will be willing to be the receiver of others. China has closed a large market with 1.4 billion people. Perhaps some other countries may follow suit, leaving not many retail investors for BTC harvesting. Without the entry of new incremental users, they will naturally have contradictions.
The second problem is that some people say that China's closure of BTC mining farms will reduce the efficiency of BTC mining. If the amount of BTC is less, it will naturally be more expensive. In fact, the number of blocks produced by BTC in a year is considered at the beginning of the design, and the system will appropriately adjust the difficulty of mining according to the computing power of the entire network. Therefore, theoretically shutting down China's BTC mines will have little effect on how many BTCs are produced in a year, and China's BTC mines may also be transferred abroad. Even if we take a step back, the total amount of BTC is still 21 million unchanged, that is, people already know what BTC's hole card is.
And what really affects the price of BTC is not the BTC that is about to be mined, but the BTC that has already been mined. Existing BTCs have been highly held by capital giants. About 90% of BTC addresses are owned by 10% of users. What do they want to do with so many BTCs? Their attitude towards BTC is one of the key factors that affect the direction of BTC's price. If they sell their BTCs now, the price of BTCs will be greatly reduced, and retail investors will not be able to digest so many BTCs.
The more important the blockchain technology?
The third question is a comprehensive issue of BTC. Some people mentioned that Ethereum is supported by Russia and BTC is supported by the United States. The current mainstream blockchain technology is all mastered abroad. If you abandon BTC now, you will abandon blockchain technology. There are many people who support this view. In fact, this is a misunderstanding of logical thinking, because the more so, the more BTC should be completely banned. Although the scale of mining in China was large before, this does not mean that it has mastered the initiative of blockchain technology, and may have become a tool for others to develop blockchain technology.
If you want to make a breakthrough in blockchain technology, you need to master the industry's initiative and issue your own cryptocurrency. There are many industries involving blockchain technology. In addition to the financial industry, it is also widely used in issues such as medical care, the Internet of Things, and copyright. And with the in-depth understanding of blockchain technology in various countries, they will gradually launch their own country's central bank digital currency. The monetary system is an important part of a country. I think no one is willing to be easily influenced by others. It is only a matter of time before the launch of their own central bank digital currency.