China has been clamping down on cryptocurrency trading in the last few months. And that pressure has only increased with the Chinese government now targeting Bitcoin miners in the country. China is the largest miner of Bitcoins in the world.
Bitcoin mining uses up a lot of energy as it requires a lot of computing power to solve the riddles that need to be cracked to mine them. Chinese authorities have expressed their concern with regard to the immense energy consumption due to Bitcoin mining. Right now, Bitcoin mining in China is estimated to use about 4 gigawatts of electricity – which is equal to what 4 nuclear reactors produce.
However, this clamp down is also about the fact that government cannot control cryptocurrencies and that these digital currencies are a perfect vehicle for fraud and money laundering. There are also fears that cryptocurrencies are being used to fuel militant organizations across the world.
Authorities have already busted thousands of criminal operations connected to cryptocurrencies such as Onecoin and Ticcoin, which were found to be schemes created to raise illicit funds. This led to the Chinese government banning cryptocurrency exchanges as well as fundraising using Initial Coin Offerings. Now, the Chinese government is going to block all cryptocurrency platforms that allow centralized trading.
China is not targeting just the issues of money laundering or fraud. The Chinese government seems to be going after the entire cryptocurrency industry. The reasons for why the Chinese government is doing this can only be speculated on. It could be that the government already has its hands full with too many financial risks at the moment. Or it could be that the government actually sees cryptos as unsafe and non-transparent, making it an inappropriate means of exchange at the moment.
Sign up for our newsletter
and don't miss out great opportunities to monotize on your bitcoin