521 Gold Stability Committee Names Bitcoin Mining: Virtual Currency Goes from “Trading to China” to “Computing Power to China”

I remembered the words “people are like seeds, be a good seed. 90-year-old Mr. Yuan still insists on working and thinking, so I topped off my first fatigue of the year. I’m going to write a little bit about my feelings about mining, in spite of the first cold and flu and confusion of my years due to fatigue, and the recent regulatory fallout. I’ve seen virtual currencies go from “trading to China” to “computing power to China”, and I’ve been thinking a lot about whether I’ll have any regrets when I look back one day.

21

 On May 21, 2021, at 10:00 pm, the third day after 518, the regulation unsurprisingly came back with a knife, the second of the key contents of the 51st meeting of the Financial Stability Development Committee of the State Council, naming “crackdown on bitcoin mining and trading”. The cryptocurrency world fell in response, with the price of bitcoin instantly dropping 7.89%. Most other cryptocurrencies fell by more than 15%, with bitcoin falling to a low of $33,506.19 on the 22nd, but the pie, which had already experienced a series of setbacks, soon climbed back to around $38,000.

  A. Rain and wind that year and back again today

  Seen those years of blockchain with or without coins youth have said – crazy cow since zuo, not really an accident. The people’s Bank of China, the Central Network Information Office and other seven departments jointly issued the “Notice on Preventing the Risk of Token Issuance and Financing” at 3:00 p.m. on September 4, 2017, requiring the cessation of all token issuance and financing activities, and once the announcement was made that day, the price of tokens on various exchanges fell all the way down, with the highest drop in tokens issued through ICO financing, with several tokens falling below the issue price and the highest drop of more than 90%.

  Since then, the cryptocurrency community knows that it is illegal to issue coins in China, and companies involved in coins have changed their registration to offshore. In China, the blockchain uses “chain circle” and “coin circle” to delineate the boundaries of ICOs and capital markets, and white papers and air coins have long been in the 1.0 era. Around the existence of value, people began to pay attention to the “mined” coins, because of the basic cost of electricity, the core value concept of bitcoin as digital gold, the coin circle has a DeFi aggregation transaction, there are ETF futures. Four years later, this time the regulatory blade is pointing to the focus – mining. The company’s hardware companies, such as Bitmain, Yibang International, and Jia Nan Weizhi, support the digital “coin” industry, known as the “mining circle”.

  Second, mining is “coin making”

  The production process of virtual currency is called “mining”, which involves the most important cost is the electricity consumed by the operation of the “mining machine”. As a result, mining sites around the world are clustered in areas where electricity is plentiful and cheap, such as Inner Mongolia and Xinjiang, where thermal power is plentiful, and Yunnan, Sichuan and Guizhou, where hydropower is abundant.

  In order to reduce electricity expenses, the mining industry has been looking to use renewable energy sources, and miners in Australia have found that using solar panels can significantly reduce costs, not only by eliminating taxes on electricity costs, but also by reducing mining costs by 75 %. in November 2018, CoinShares’ trends, costs and energy consumption for bitcoin mining showed that most bitcoin mining is taking place in areas around the world areas with renewable energy. Of this, about 80 % of mining activity is powered by renewable energy sources. This once data may have made Musk’s case for rejecting bitcoin a lot weaker.

  3. “Mad Cow” Angers Regulation

  But because the cryptocurrency world is on fire, social media speculation at home and abroad is constantly proclaiming “freedom to speculate on coins”. The focus of the financial market ran from the stock market to the cryptocurrency circle, and the coin price under the “crazy bull market” gave rise to crazy mining, and electricity was not as careful and calculated as it was at the beginning. In the cheer of high returns, the greedy market has been doing everything it can to get the available power and resources. Idle data centers and stable and sustainable thermal power are the targets used by the mining community to “make money”.

  In November 2019, in the context of promoting the development of blockchain technology, the National Development and Reform Commission removed mining from the catalog of industries to be phased out, all as if overnight. It is well known that thermal power generation consumes a lot of energy and is obviously used for mining, which is clearly contrary to the recently proposed “carbon peak, carbon neutral”. on May 18, the Inner Mongolia Development and Reform Commission issued a notice saying that in order to further broaden the source of virtual currency “mining” enterprises, the problem of the situation channels. The company’s main goal is to provide a platform for reporting virtual currency “mining” enterprises. The main scope of the report has four items: virtual currency “mining” enterprises; virtual currency “mining” enterprises disguised as data centers to enjoy tax, land, electricity prices and other aspects of preferential policies; virtual currency “mining” enterprises engaged in virtual currency “mining Enterprises that provide services such as venue leasing for virtual currency “mining” enterprises; enterprises that obtain electricity supply through illegal means and engage in virtual currency “mining” businesses. At the same time, data centers around the world have also checked themselves to clarify and clear the air.

  The future of mining pools, miners and mining farms

  After 9.4 of 2017, although the familiar Chinese name structure still shines in the cryptocurrency circle, after several rounds of regulation, except for Sun Yuchen, trading platforms have generally kept a low profile. The company’s main focus is on the development of a new product, the “new” product. Although the purchase of mining machines encountered “force majeure”, but most sellers gave a selective program, stay or go voluntarily. Whether or not to continue to play with the mine, the risk-reward model in most cases have a choice. The attitude is also to go without complaint and without illusions.

  The cryptocurrency circle has gone from trading de-china to the arithmetic de-china stage within our country, but the profit-seeking of capital does not end there. If there is no available electricity, no data center resources, no clear legal definition, and also unknown regulatory risks, the mining circle can’t really live well in the country either. Before finding an effective new outlet, it is the best policy to evacuate the mine as a minting factory. This is equally significant for the stability of the cryptocurrency circle.

  The third article of the fifty-first meeting of the Financial Stability Development Committee of the State Council is to continue to deepen reform and opening up. It is proposed to further promote the reform of interest rate and exchange rate market, accelerate the reform of capital market, deepen the reform of financial institutions, follow the green concept to carry out investment and financing behavior and continue to expand the high level of financial openness. For China’s domestic virtual currency, there has been a situation of mutual trouble between the regulation and the market, and going to sea may not fundamentally solve these troubles.

  Following the transaction to go abroad, the mine is also going to go abroad. Algorithm power and trading, the ability to be in the digital age is not only reflected in the digital currency, just the energy of finance amplifies everything. A thousand words, the Internet has accelerated the speed of information and capital flow, fintech continues to give capital to take accelerating stimulants, how to find for the crazy capital to find a quiet and joyful path from the good, is the global financial market in the digital era are facing the problem.

  Author Bio.

  Wang Juan, Professor, PhD (post) in Applied Economics, Xi’an Jiaotong University, Postdoctoral Fellow in Systems Engineering, University of Florida, USA; Member of OECD Special Committee on Blockchain Policy; Deputy Director of Hainan Green Finance Research Institute Academy; Chairman of Hainan Green Development International Consulting Co.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/521-gold-stability-committee-names-bitcoin-mining-virtual-currency-goes-from-trading-to-china-to-computing-power-to-china/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-05-23 23:40
Next 2021-05-23 23:50

Related articles