China has again taken action to try to wipe out the use of cryptocurrencies like bitcoins from their region. This time they have taken the step of banning the activities like mining and trading, which has been observed at high levels in some areas of China. Everyone is aware of the various moves that continue taken by China regularly, and this seemed to be quite severe. This time an announcement made by China has even affected the crypto market as it has also faced a downfall that no one expected, albeit there are crypto signals that some professionals might have seen.
- China-based investors are concerned about this ban because they have invested a considerable amount in bitcoins and other cryptocurrencies. It is the only reason which makes it impossible for them to step back from the cryptocurrencies based activities. They have also offered access to some of the overseas platform for continuing the mining and trading activities. Users have to just access official digital currency for performing mining-related activities.
- Some of the sources revealed that Mongolia, which is China’s inner region, has implemented the regulations to punish organisations and investors who will get involved in the mining-based practices. They will be charged a high penalty, which will really put a heavyweight on their pockets. This step has been mainly taken so that investors should step back from mining on their own.
- This all started when the Vice-premier of China, Liu, mentioned cracking down on the activities that include bitcoin mining and trading, which will prevent the spread of individual risk to the social area. It has been four years now when China started taking different actions for mainly banning the flow of bitcoins from their country. Due to a high number of bitcoin investors, the government’s movie is not able to attain success, which admires them for taking more actions.
A plan to charge heavy penalties on various industries
- Mongolia’s officials have not planned to target the companies, including telecommunications and internet companies, to offer services related to the bitcoins mining and trading of cryptocurrencies. Several internet providers companies will also suffer a loss if they discontinue providing internet service because most of the users consider the internet just for mining and trading.
- Even the development and reform commission of Mongolia stated that if the companies will still not follow the instructions, then the only option left for them is that their license to operate will be revoked. If they will ever found for mining or trading activity of bitcoins or any other digital currencies.
Things do not end over here as the individuals who will also get involved in the mining of bitcoins will have to face strict punishments and penalties. A harsh step would be taken against those who will be involved in money laundering using cryptocurrencies.
What is the reason for the ban and sudden action by China?
Earlier, China’s government was not so strict against this decision, but things changed after imposing the ban on bitcoin mining projects. Bitcoins mining consumes a high level of energy, resulting in the wastage of fossil fuels and leading to harm to the environment. Actually, the north region of China was not able to meet the electricity target mentioned by Beijing, which is the reason for the commencement of this issues. Bitcoin mining is not an easy task as here the miners have to engage on hi-tech computers and work on solving the mathematical based complicated puzzles. Those who can solve them can as attain the bitcoins as a reward.
Let’s talk about the energy levels that are utilised for the process of bitcoin mining. It is pretty high because very advanced computer systems are being used for performing the mining. On an average basis, bitcoin mining requires 112.57 terawatt-hours of energy per year. China is a region where 65% of total bitcoin mining of the entire world is performed. It is only because of the cheapo energy prices the majority of individuals perform bitcoin mining on a regular basis. But now China has adopted a plan to go green which is the reason for imposing restrictions on such activities, which creates a hassle for the environment.
Founder Dinis Guarda
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