The global market for Crypto currencies should go over the $1 trillion dollar
mark in 2018. According to coinmarketcap.com,the top 100 crypto-currencies are
already worth over $800b USD.
While well-known Bitcoin whales and players in the crypto-space such as the
Winklevoss twins,Roger Ver, Mike Novogratz,and others get a lot of attention in
the West one must remember 4/5 of global computational power dedicated to mining
is in China. Not to mention that all manufacturers of ASIC miners used to mine
Bitcoin and others currencies are manufactured in China.
There are many, many bitcoin millionaires and some billionaires in China. However,
in 2017 as prices skyrocketed, cryptocurrencies have finally caught the attention
of the Chinese government. This massive, quick run-up in prices is the worst thing
that could have happened to the local crypto community in China.
There is a reason the Chinese have a saying ” Make a fortune in Silence”.
China has since banned Initial Coin offerings and the conversion of crypto-currencies
into RMB. They have not yet banned mining of crypto currencies or investing or holding
crypto currencies, however, moves are afoot now to clamp down on crypto currency miners.
Local officials have been asked to investigate the mining operations of Bitcoin miners.
China has been in a major struggle to reduce energy usage for the last several years
and now these mining companies have emerged with very energy-intensive computer
networks solving equations in order to earn crypto currencies. In most cases, sweetheart
deals have been struck with local electrical grids to provide cut-rate electrical fees.
The People’s Bank of China (PBOC) outlined the plan last week to go after and ask
mining companies in China to exit the business soon.
The price of Bitcoin, the most popular and highly valued cryptocurrency, has seen a
roughly 20-fold rise in 2017. China is also the world’s capital of the Bitcoin mining
industry with around 80% of total newly mined Bitcoins mined in China. Chinese Bitcoin
miners are able to take advantage of cheap electricity prices in some areas in the
country to increase their profitability.
China is home to four of the five largest Bitcoin mining pools during the past year,
including Antpool,F2Pool, BTCC and BW Pool. The latest policy moves, however, are
likely to force these miners and others in China to move elsewhere or find other
ways to exist.
After Beijing shut down Bitcoin exchanges and banned initial coin offerings last
year, investors and traders sought ways to continue trading or issue new tokens via
offshore hubs such as Hong Kong. Some Bitcoin exchanges in Hong Kong, such as
Bitfinext and OKEX, allow Chinese investors to register and trade Bitcoins.