Before the raid was carried out on mining cryptocurrencies, especially Bitcoin and their transactions, China was a paradise for these miners and of course there were various positive impacts. But suddenly, the Chinese government actually banned it. What's wrong?
In April 2021, 46% of the global bitcoin hashrate network originated in China, while in the US it was only 16.8%. But that number changed completely last August, where the hashrate in the US shot up to 35.4%, and the next position was Kazakhstan with 18.1%. This means that miners are flocking out of China.
The reasons given are mainly that Bitcoin mining is considered harmful to the environment and not in accordance with China's target of reducing emissions in order to anticipate climate change.
The spokesperson for the National Development and Reform Commission (NDRC), Meng Wei, recently at a press conference said Bitcoin mining consumes a lot of energy and produces high carbon emissions.
China's actions usually cut the price of Bitcoin quite deeply. Now there is an astonishing theory behind China's actions, namely that they are deliberately creating a commotion so they can buy Bitcoin at low prices.
“It has been speculated that China has repeatedly banned Bitcoin from deliberately lowering its price so they can buy more Bitcoin cheaply, so I wouldn't be surprised if Beijing would reverse their rules on crypto,” said Nick Spanos, founder of Zap Protocol.
However, the wild theory has no proof. In addition, China may indeed actually ban Bitcoin because it considers it not in accordance with the country's economic principles and difficult to regulate, in addition to endangering the environment.
"In China's economic plan for the next 5 years, the financial system must serve the real economy, not speculation. China is very reluctant to financial speculation because it is related to financial stability and of course, cryptocurrency is driven by speculation," said Luisa Kinzius, director at Sinolytics.