China Youth Daily: Financial Commission names Bitcoin “mining” for the first time, or will become history in China

A “mining” source said that the above policy introduced in Inner Mongolia is a signal that the original distribution in Sichuan, Xinjiang, Inner Mongolia and other places of mining owners will be further transferred overseas.

China Youth Daily: Financial Commission names Bitcoin "mining" for the first time, or will become history in China

With the tightening of domestic regulations, the “mining” of virtual currencies such as Bitcoin may become history in China, and most “miners” will move to other countries, but there are still some “miners “The majority of miners will move to other countries, but some may go underground. Some of the young people who lost money in the “leek feast” are still expecting the myth of riches to happen to them.

“Originally wanted to plunge the bottom, did not expect (was) copied home.” In the past few days, Liu Jun (a pseudonym) has seen a “leek feast” with his own eyes, as he is in several “coin speculation” weibo groups. As a self-publisher, he has long been concerned about the virtual currency market, and in his spare time, he also invested some money to “speculate on coins”. In his opinion, today’s virtual currency market has long lost the atmosphere that attracted him, but is full of lies and “air coins”.

On the night of May 23, virtual currencies collapsed again, with bitcoin falling by more than 16% and litecoin and ethereum also falling by a lot. A month ago, Bitcoin was more than $60,000 a piece, and in the blink of an eye it’s down to more than $30,000. That’s not even a few days after the last plunge.

On May 19, the virtual currency market also collapsed almost across the board, with bitcoin falling by more than 30% during the day, once below $30,000, dogcoin, which has seen its price soar since this year, falling by nearly 55% during the day, and platform coins from the three major exchanges – Coin, Hotcoin and OKEx – also plunging by more than 40%. This led to a large number of traders “blowing up” their positions and losing more than $46 billion.

The unprecedentedly strict regulatory policy is an important reason for the plunge in virtual currencies across the board. on May 18, the China Internet Finance Association, the China Banking Association and the China Payment and Settlement Association jointly issued an announcement to prevent the risk of speculation in virtual currency trading. on May 21, the State Council Financial Stability Development Committee meeting clearly proposed to crack down on bitcoin mining and trading practices.

Industry insiders point out that with the tightening of domestic regulation, bitcoin and other virtual currency “mining” may become history in China, and most “miners” will move to other countries, but there are still some “miners “The majority of miners will move to other countries, but some may go underground. Some of the young people who lost money in the “leek feast” are still expecting the myth of riches to happen to them.

“One word can control the direction of the coin price”

In the virtual currency world, bitcoin and ethereum are highly recognized for their value, and their market capitalization and liquidity are in the forefront, followed by various smaller coins. Since the beginning of the year, Dogecoin (DOGE Coin) has emerged from the crowd, after the price of this small coin, which was originally just a programmer’s joke, had not fluctuated significantly.

The change happened in early February this year, when Tesla founder Elon Musk made several social media posts in support of Doge Coin, driving the price of Doge Coin to soar 60%. Since this year, the price of dogcoin has reached record highs, rising more than 200 times in a few months, and its market capitalization once reached about $92 billion.

The surge of dogcoin has stimulated more “innovation” in the cryptocurrency world, with “Shiba Inu Coin”, “Piggy Coin”, “Pikachu Coin “The coins are also starting to appear, and the coin circle is turning into a “virtual zoo”. But in the opinion of industry insiders, these are invariably “air coins” with no real value, and there are often “bankers” behind them.

Liu Jun believes that, judging from the ups and downs of the market, the institution represented by Musk is the winner of the virtual currency behind the scenes manipulation. For example, when Musk announced that he could buy Tesla with Bitcoin, Bitcoin went up by $1,000; when he announced that Tesla would suspend Bitcoin payments, the price fell by 10%.

Liu Jun once saw Musk as an idol, but he changed his mind during this time: “He’s the one leading the short-selling, he’s the one leading the shouting long, and he can control the direction of the coin price with a single word.” As an authority, he now only hopes that institutions and capital can “take the lead in pulling the plate” and properly maintain the price of mainstream tokens such as bitcoin.

William, a researcher at OKEx Research Institute, analyzed the “5-19 cryptocurrency market crash” as a result of both the large bubble that had accumulated in the virtual currency market and the negative comments made by Musk and others that shook the market’s confidence in the price of bitcoin.

At the beginning of February this year, bitcoin prices had been hovering around $30,000 per piece repeatedly, but with Musk’s announcement that Tesla was buying bitcoin and frequently shouting orders, market sentiment was driven up again, driving bitcoin’s unit price straight up to around $60,000. But on the eve of May 19, Musk made frequent statements against bitcoin, including Tesla stopping accepting bitcoin payments, which shook the market’s confidence. William believes that most of the animal coins that the market has been chasing over the past few weeks are a reflection of irrational behavior in the market, reflecting the huge bubble in the market.

Mining May Become History in China as Funds’ “Access” Blocked

The company’s main business is to provide a wide range of services such as account and payment settlement, promotion and display for virtual currency trading. The association also requested member institutions to refrain from conducting virtual currency exchange and other related financial services, resolutely resist illegal financial activities related to virtual currency, and not to provide account and payment settlement, promotion and display services for virtual currency transactions.

Some industry insiders point out that the above regulatory measures are equivalent to blocking the withdrawal channels of RMB and virtual currencies, which can protect many small white investors. William also believes that this is equivalent to blocking the “in and out channel” between virtual currency and legal tender, the virtual currency invested by users can not be realized, for new users is a fatal blow.

Guangzhou-based investor Xiao Sun wanted to continue buying virtual currency through virtual currency trading platforms such as FireCoin these days, but was stopped in the payment process. “Alipay prompted as a dangerous transaction and directly did not let me pay, I felt a little false.” In his impression, this situation occurs very rarely, and then considering the recent surge and plunge of the cryptocurrency market, “simply did not buy it.”

Xiao Za, a partner at Beijing Dacheng Law Firm and director of the China Banking Law Association, said that the regulatory authorities have never been lax in regulating bitcoin and other crypto digital tokens, especially the State Council’s Financial Stability Development Committee meeting, which clearly proposed “cracking down on bitcoin mining and trading”, which means that bitcoin mining and other crypto token “mining” behavior in China has been determined to become history.

On May 18, the Office of the Inner Mongolia Autonomous Region’s Energy Consumption Control Emergency Department issued a notice on the establishment of a reporting platform for virtual currency mining enterprises to fully accept reports on virtual currency mining enterprises. The report on virtual currency “mining” enterprises mainly involves four types of enterprises: virtual currency “mining” enterprises; virtual currency “mining” enterprises disguised as data centers to enjoy preferential policies in terms of taxation, land, electricity prices, etc. The “mining” enterprises; enterprises that provide services such as site leasing for enterprises engaged in virtual currency “mining”; enterprises that obtain electricity supply through illegal means and engage in virtual currency “mining” business.

The “mining pool” consisting of computers and graphics cards is the upstream industry of the virtual currency industry. In April of this year, scholars from the Chinese Academy of Sciences and Tsinghua University published a paper entitled “A Policy Assessment of the Carbon Emissions and Sustainability of China’s Bitcoin Blockchain Operations,” which predicted that mining pools located in China account for about 78% of global computing power.

Such a large number of “mining” equipment not only drives up the price of graphics cards, hard drives and other products, but also consumes a lot of electricity. Without any policy intervention, the annual energy consumption of China’s bitcoin blockchain is expected to peak at 296.59 TWh in 2024, generating 130.5 million metric tons of carbon emissions, or about 5.41% of China’s carbon emissions from electricity generation, according to the aforementioned scholarly analysis. This is larger than the total annual greenhouse gas emissions of the Czech Republic and Qatar.

Some “mining” sources said the above policy in Inner Mongolia is a signal that mine owners originally located in Sichuan, Xinjiang, Inner Mongolia and other places will further move overseas. At present, there are already many mine owners in the release of Africa, West Asia, Eastern Europe and other regions of overseas mining investment information.

Global regulation is tightening, but some people still want to “enter”

In fact, strict regulation of virtual currencies has been the consensus of many regulators around the world.

In the United States, where virtual currency trading is most active, a recent report by the Treasury Department noted that virtual currencies facilitate illegal activities, including tax evasion, for which they have developed a new financial account reporting system. In the future, virtual currency and crypto asset trading accounts, as well as payment service accounts that accept virtual currencies, will be included in the government’s monitoring category, and transactions related to crypto assets with a market value of $10,000 or more will need to be reported to the IRS.

Singapore, South Korea, and Japan have all introduced relevant industry regulation policies, such as requirements in terms of investor thresholds, exchange licenses, and KYC identification (real name authentication mechanisms). India is ready to directly ban people from trading and holding cryptographic digital currencies. William analyzed that countries around the world have recognized the risks of the virtual currency market, and it is expected that relevant regulatory policies will be introduced one after another, which will put the virtual currency market under certain pressure and usher in a wave of plunge.

The Hong Kong SAR government has proposed in a policy paper to regulate virtual asset service providers for compliance in combating money laundering and terrorist financing. The HKSAR government also plans to submit a draft law amendment to the Hong Kong Legislative Council by the end of 2022 regarding the establishment of a mandatory licensing regime for virtual currency exchanges. This means that in the future, only licensed exchanges will be allowed to legally provide virtual currency trading services in Hong Kong.

Xiao Za believes that there is a general consensus for strict regulation, but there are still many challenges. For example, there are difficulties in using technology to determine the objects engaged in speculation, mining, etc., for precise regulation and control, and there is a certain regulatory vacuum due to the disintermediation, de-borderization, non-presence, anonymity and the quickness of transactions in virtual currencies.

In addition, the scope of regulation is broader and more difficult. In these years, the cryptocurrency circle is hot, and there are many miners and speculators, who can not only use physical mining machines to mine, but also use cloud computing power to mine. There are both large-scale mining farms and small-scale individual and group mining, and for small-scale and small-scale mining, there are difficulties in supervision. And the regulatory effect is also difficult to determine, some institutions exist in the country is only its technology company, and the main body of the institution is located overseas, it is difficult to form an effective regulation of it, or in our country outside the scope of regulation, but has caused a threat to the financial security of China.

However, the strengthening of regulation in various countries has not been able to stop the exuberant enthusiasm of some people. Liu Jun noticed that a few days after the plunge of the cryptocurrency market, many people in the cryptocurrency circle were arguing again about whether to “bottom out” or “leave”. Some “old people in the cryptocurrency circle” are releasing “bottoming out” signals, while some young people are still “sticking to their beliefs” by buying cloud computing power, transferring ” Some people are trying to prove that bitcoin is a more effective value store than the U.S. dollar by forwarding positive bitcoin news to their circle of friends.

After a long time in the cryptocurrency world, Liu has come to understand that one crash may be just the beginning of the next hype, and there may be another group of young people ready to “enter”. “As long as the myth of wealth creation is still alive, this kind of thing may not stop.”

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