Overnight plunge of 30%, a month of prices nearly “cut”, the explosive position of empty hands …… recently, bitcoin and other virtual currency prices soaring and plummeting, provoking onlookers alarm, investors lament. The company’s main business is to provide a wide range of products and services to the market.
Crazy mining under the guise of “data center
On the banks of a desolate river, in a simple factory building made of steel pipes and colorful steel plates, nearly 1,000 computer mainframes are running at high speed on rows of large iron racks, emitting a wave of heat and buzzing fans.
If not for the locals, few people would know that this is a bitcoin “mining site”. The car that delivers the “miners” meals leaves daily from the town of Guzan in Kangding, Sichuan province, and takes more than half an hour to reach the site after walking a dirt road that is not even on the map.
Like this hidden in the deep canyons of the “mine” in the western Sichuan region are not a few, “mine” owners are eyeing the cheap hydropower resources here. Many of them are engaged in bitcoin mining in the name of “hydropower consumption” and under the guise of “data center”.
“Wherever the electricity is cheap, that’s where we’ll go.” A “miner” told reporters that he generally digs in the western Sichuan region during the spring and summer water period, and then he “moves” to Inner Mongolia and Xinjiang in the winter, using thermal power to continue digging.
Don’t look at bitcoin is a virtual commodity, but to get a bitcoin is time-consuming and labor-intensive, need to be based on the algorithm through the computer continuously computing and come, commonly known as “mining”. The market has seen the emergence of “mining machines” specifically designed to mine bitcoins, and some people have purchased “mining machines” on a large scale to form “mining farms” and “dig” day and night. “……
“As bitcoin gets less and less mined, running a ‘mining farm’ faces higher capital investment and longer return cycles.” A “mine owner” told reporters that previously dozens or hundreds of units were purchased for “mining machines”, but now thousands of units are moving. Some “mine” a day on the electricity consumption of millions of degrees, many directly from the hydroelectric power station wired with electricity.
There was also a “mine owner” proudly told reporters that its “mine” in the southwest of a place a year power consumption equivalent to three cities a year total electricity consumption.
Industry insiders said that not only bitcoin, with the virtual currency such as ethereum, dog coins continue to be introduced, the entire virtual currency mining power consumption is exploding, and most of these “mining” concentrated in China, will bring enormous pressure on the energy supply.
The “cryptocurrency” speculative trading risk is heavy
The virtual currency is called “currency” but not real money, can not be used as currency in the market circulation, and should not be speculative trading. However, driven by interests, there are still people who are desperate to take risks and turn a blind eye to the risk of false assets, business failure and investment speculation in “cryptocurrency” trading.
–The “bankers” set up price manipulation. The industry, including bitcoin, the vast majority of virtual currencies have a huge number of holders, they are sitting on the market price manipulation is not difficult.
“The top 10 holders have nearly 40% of the tokens in circulation, so it’s easy to manipulate the price as long as the huge holders have the same goal.” The head of an overseas trading platform for virtual currencies told reporters that the maximum drop of the coin on May 19 was over 50%, less than one-third from the previous price peak, and many investors lost a lot of money.
–The air coins are not only forbidden. Under the heavy hand of policy, the domestic initial token offering (ICO) is almost purged, but many platforms have moved their transactions to overseas platforms, but the main battlefield of issuance publicity is still in the country, and find ways to bypass the risk control of domestic financial institutions for top-up transactions.
“Recently dog coins have skyrocketed, I think people are attracted to coins with animal names, so I invested in Shiba Inu coins again, which rose more than 20 times in just a few days, but recently the price plummeted and the profit was almost completely retracted.” Investor Liu Peng said.
In this blind investment mentality encouraged, more concept odd “air coin” began to emerge, cat coin, pig coin, eel coin endless …… these no physical support, does not have the application value of the “air coin”, once the tide recedes will bring huge losses to investors.
–The leverage trading magnifies the investment risk. In the virtual currency dramatic market fluctuations, many investors add leverage to try to “bike to motorcycle”, the results are often lost.
In January of this year, Mr. Zhou entered the cryptocurrency world with 500,000 yuan of funds, and within a few months, his accounts were up to 3 million yuan. The recent bitcoin plunge, the most severe when he faced tens of thousands of dollars in losses every few minutes. The company’s main business is to provide a wide range of products and services to its customers.
The transaction data provided by the third-party platform shows that as of 15:00 on the 25th, there were more than 140,000 people in the past 24 hours virtual currency leveraged transactions burst, amounting to 4.641 billion yuan. And on the night of the 19th, the amount of blowout is more than 40 billion yuan.
Stay away from virtual currency trading speculation activities
China’s relevant departments have long been aware of the risks associated with virtual currency trading speculation, and have issued timely warnings and introduced initiatives to rectify them many times.
In 2013, the People’s Bank of China and other five departments jointly issued the Notice on Preventing Bitcoin Risks, requiring financial institutions and payment institutions not to conduct business related to bitcoin. 2017, the central bank and other seven departments called a halt to all kinds of token issuance and financing, and carried out special rectification. Subsequently, China’s virtual currency trading platforms and ICO trading platforms basically achieved a risk-free exit, and the global share of bitcoin traded in RMB once dropped to less than 1%.
Despite this, some people are still watching and maintaining “mining” operations; some virtual currency trading platforms are still able to bypass the risk control of domestic financial institutions and carry out operations such as top-ups, withdrawals and purchases.
Recently, speculative activities in virtual currency trading have rebounded. The Internet Finance Association of China and other relevant associations jointly issued an announcement to alert against the risk of speculation in virtual currency trading, and on May 21, the 51st meeting of the Financial Stability Development Committee of the State Council explicitly proposed to crack down on bitcoin mining and trading practices.
“The next step should be to take targeted measures to carry out focused rectification activities on virtual currency mining and trading practices.” Dong Ximiao, chief researcher of China Merchants Union Financial, suggested that, on the one hand, local governments should call off investment attraction for enterprises suspected of mining and cut off the incremental volume. Comprehensive adoption of electricity prices, land, taxation, environmental protection and other means to promote the orderly withdrawal of the stock of mining enterprises. On the other hand, the institutions and platforms that illegally participate in virtual currency trading, speculation or provide support services for them should be disposed of jointly with the judicial department in a timely manner to increase the cost of violations and increase the deterrent effect of remediation.
Experts say that virtual currency is not a “one-size-fits-all” investment, and virtual currency trading contracts are not protected by law. In the face of the relevant departments three orders of tips and admonition, the majority of investors should enhance risk awareness, stay away from virtual currency trading speculation activities, to guard their “money bag”.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/mining-consumes-a-lot-of-energy-and-the-price-is-soaring-and-plummeting-investigation-into-the-chaos-of-virtual-currency/
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