BigONE’s View: Recent crackdowns in the bitcoin mining industry by Central Governments: What are the implications?
The Bitcoin mining sector has gone through a lot of changes. Various central governments have taken steps to impede bitcoin mining. China’s crackdown on bitcoin mining wiped off almost $400 billion in market value just last month. Other countries’ central governments have begun to imitate China’s regulatory activities. BigONE wants to share its views with users and discuss the bitcoin mining industry's crackdown.
What induced this move by central governments?
BigONE believes that most central authorities and governments fear that cryptocurrencies pose a danger to their countries’ economic stability. Given the volatile nature of virtual currencies, we believe they are suspicious of their impact in the absence of government regulation. Central governments have begun to create their own centralized cryptocurrencies to keep their money supply under control.
BigONE believes that one of the reasons for the bitcoin mining crackdown is that most powerful central governments want to be viewed as a global leader in “clean energy.” As a result, the environmental risks associated with bitcoin mining’s preferred fossil fuel use make it simpler for those central governments to crack down on bitcoin mining.
Cryptocurrency Mining environmental impact
Bitcoin now consumes roughly 110 Terawatt Hours each year, according to the Cambridge Center for Alternative Finance (CCAF). That is more than Nigeria, Africa’s most populated country consumes in a year. BigONE wants users to know that Bitcoin emits 36.95 megatons of carbon dioxide (CO2) every year. This, in turn, adds to the ozone layer’s depletion. BigONE wants users to be aware that China, one of the nations that cracked down on bitcoin mining and used to be home to 65 percent of bitcoin miners, derives the majority of its electricity from coal-fired power plants. Coal combustion contributes to climate change by emitting a large amount of carbon dioxide.
Some bitcoin advocates and enthusiasts have minimized bitcoin mining’s environmental impact, suggesting that mining should be encouraged in areas with a high renewable energy index.
BigONE believes that the central government’s decisions to crack down on bitcoin mining, whether for a good reason or not, will have implications. We will be discussing the implications in the following section.
Implications of the crackdown on bitcoin mining
China intensified its restrictions on bitcoin mining last month. China is claimed to have done 75 percent of the world’s bitcoin mining. According to some reports, the Chinese government has banned more than 90% of mining activities. BigONE believes that this will increase the profitability of bitcoin mining. Bitcoin mining payouts are now 6.25 BTC. However, because the total supply is limited to 21 million coins, the rewards are half every four years. BigONE believes that the Chinese crackdown on bitcoin mining will boost the mining share of other bitcoin miners, hence increasing bitcoin rewards and mining profitability. BigONE believes that when there is less equipment mining, the difficulty of mining will decrease.
BigONE also believes that cracking down on bitcoin mining will encourage centralized virtual currencies, which is in direct opposition to everything Bitcoin and decentralized cryptocurrencies stand for.
BigONE’s View: Way Forward?
BigONE believes that bitcoin mining activities should be concentrated in regions where there are major renewable energy sources. BigONE believes that, while mining is more profitable with less equipment online, it is detrimental to the general growth of the cryptocurrency ecosystem when there are fewer miners and bitcoin mining is regulated. BigONE believes that affordable and accessible renewable energy sources should be investigated to boost bitcoin adoption and growth.
BigONE is a global cryptocurrency exchange that provides a platform for trading various cryptocurrencies. It was founded in 2017 and registered in the Netherlands. The group operates in Russia, Brazil, Vietnam, Seychelles, Singapore, Japan, and Indonesia, providing marketing, investment, and blockchain technology research & development.