By Steve Dellar  |  01-11-2018   News
Photo credit: Yuriy Kopilets | Dreamstime.com

In what many fear is another nail in the coffin of the Crypto Currency market, Chinese authorities, realizing the grandiose electricity consumption cryptos are putting on the Chinese energy market, have ordered a closure of the Bitcoin mining industry.

The so-called miners create new bitcoins by solving complex mathematical problems used to validate new bitcoin transactions.

The reliance on raw computing power makes the process more akin to industrial manufacturing than traditional high-technology businesses.

Given that China is responsible for 75% of the world’s Bitcoin mining operations, this could mean a serious drop in the energy requirements to make more of the virtual coins. the Chinese authorities are cracking down after reports have shown that Bitcoin mining was consuming a lot of unregulated energy in the Chinese countryside.

Liao Xiang, chief executive of Lightningasic, a Shenzhen-based mining operation acknowledged the problem: “The difficulty is that setting up in other countries takes time and capital to build large-scale data centres.”

“It needs so much electricity. A typical industrial park doesn’t meet the requirements.”

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Notice from China special rectification on risks in Internet Finance department to local government to make a plan before Jan 10th - “ lead mining factories quit gradually” <a href="https://twitter.com/hashtag/btc?src=hash&amp;ref_src=twsrc%5Etfw">#btc</a> <a href="https://twitter.com/hashtag/bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#bitcoin</a> <a href="https://twitter.com/hashtag/BitcoinMining?src=hash&amp;ref_src=twsrc%5Etfw">#BitcoinMining</a> with Central Bank official Chop. Prepare for the roller coaster!!!! <a href="https://t.co/OLv8j1veHb">pic.twitter.com/OLv8j1veHb</a></p>&mdash; 🎀 (@cryptovenus) <a href="https://twitter.com/cryptovenus/status/949405526315716608?ref_src=twsrc%5Etfw">January 5, 2018</a></blockquote>

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Miners took advantage of the cheap electricity in regions without oversight, normally rich in coals or hydroelectric power such as Sichuan.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">China&#39;s largest cryptocurrency has boomed by defying the principles behind bitcoin&#39;s rise <a href="https://t.co/NVrazNE4MC">https://t.co/NVrazNE4MC</a> <a href="https://t.co/s7ikxvmhAj">pic.twitter.com/s7ikxvmhAj</a></p>&mdash; Bloomberg (@business) <a href="https://twitter.com/business/status/951417986803433475?ref_src=twsrc%5Etfw">January 11, 2018</a></blockquote>

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Meanwhile, Bitcoin itself continued to sink, now almost 30% down from the top of 19,000 it traded at the time of writing around 13,000 only and was looking to break its monthly bottom of 12,000 soon.

Source:

https://www.wsj.com/articles/china-quietly-orders-closing-of-bitcoin-mining-operations-1515594021

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2 Comment/s


Anonymous No. 15823 1515687485

If they harvest 75% of all Bitcoins, what does that mean for the price?

Anonymous No. 15834 1515694883

Down down

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