Could China’s Latest Mining Ban be a Blessing in Disguise for the Industry?
Many of our readers might have observed that over the course of the past couple of days, nearly all of today's crypto media outlets have been running stories related to the Chinese government’s recent blanket ban on its BTC mining market. However, despite the prevalence of such news within the current financial news cycle across the globe, the price of Bitcoin has remained largely unaffected.
Not only that, what some people might find counterintuitive is the fact that a host of analysts now believe that this proposed ban could in-fact help Bitcoin in the long run – since China has anyway looked to centralize its altcoin sector from the very start.
A Closer Look at the Matter
As mentioned previously, China's National Development and Reform Commission (NDRC) recently added the crypto mining industry to its revised list of market sectors that it seeks to ban (w.e.f). This decision, as per Reuters and some other media outlets, is based on the fact that many of the mining rigs located within the Eastern powerhouse are either not environmentally friendly or do not follow many of the regulations laid out by the government in regards to digital assets.
And while no official statement has been released as to how the government aims to enact such a massive blanket ban, the public at large has been given until May 7 to propose changes to this revised list.
At this point in the article, it should be made clear that this is hardly the first time that the Chinese government has shown a clear bias towards the altcoin sector. For example, since 2017, the country has released a number of anti-crypto regulations so as to curb the growth of this otherwise burgeoning domain. However, most of these legislations have been met with a high degree of indifference from the global crypto community.
Other Key Details Worth Noting
A couple of years back, when the Chinese government adopted its hard regulatory stance towards the digital currency domain, the market as a whole was hit quite severely — albeit for a short period of time. However, this time around, the NDRC’s announcement seems to have had no effect on the price of premier assets like BTC, ETH— with Bitcoin even surging to its annual high of $5,1080 just a couple of days back.
- Naysayers have often advocated for a ban on the Chinese Bitcoin mining industry since the nation seems to be in control of a large chunk of this digital sector. However, it now appears as this latest ban will allow for a more even distribution of the currency’s hashrate — thereby allowing for the network to become more secure and decentralized.
- Secondly, the ban could also help mitigate many of the concerns related to BTC being “energy intensive” and non-environmental friendly, since, it is being reported that mining operators within China are already looking at countries like Canada, Iceland to set up their operations — primarily because these nations have an abundance of cheap, clean electricity (obtained through geothermal and hydroelectric sources).
In closing out this piece, it should be highlighted that while some people may perceive these latest impositions on the Bitcoin mining market as being unfair, this decision could turn out to be a blessing in disguise for the global crypto community in the long run— since it will help decentralize the BTC ecosystem by uniformly distributing the currency’s hashrate across the globe.