Why is Xinhua News Agency focusing on the “cryptocurrency circle”?

Six investigative reports in 10 days, from mining to trading to financing, involving many important links in the virtual currency industry chain……

Six investigative reports in 10 days, from mining to trading to financing, involving many important links in the virtual currency industry chain …… Xinhua News Agency’s investigative reports have hit the nail on the head of the “coin circle” chaos, not only in the “coin circle”. The company’s main goal is to provide the best possible solution to the problem of the virtual currency industry chain.  Why is Xinhua News Agency focusing on the “coin circle”?

The “air coins” should not be allowed to harvest the hard-earned money
The crash, dive, bloodbath …… Since May 19, these “tragic” words have been used over and over again on the market trends of virtual currencies such as Bitcoin. Each time the price changes dramatically, it touches the hearts and minds of the “speculators” and stimulates the nerves of every onlooker.  

The reporters contacted their acquaintances in the “cryptocurrency circle” to learn more about the situation, and there was a lot of grief. Some of them have instantly “evaporated” because of the leveraged account of 3 million yuan, some of them have recently lost all their profits, and some of them have lost a lot of money because of the abnormal operation of the trading platform ……

The risk warning brought about by the overnight plunge was stronger than the millions of times the ear was raised, but these painful costs could have been avoided. Reports must be issued as soon as possible to reveal the investment risks in the cryptocurrency world!  

The first piece introducing the risks of the cryptocurrency circle to the public was successfully broadcast on May 20 and immediately drew widespread market attention. In the following 10 days, virtual currencies experienced waves of “roller coaster” ups and downs, and Xinhua News Agency followed the hotspots and sent out one investigative report after another, from which many people saw the “doorway” of virtual currency trading speculation.

The founders who focus on making money through “air coins” often first register a shell company and spend money to find an outsourcing team to design a “virtual coin”; through advertising, lectures, celebrity stands, webcasts, etc., the project will be blown out of proportion; then pull investors to use overseas platforms to crowdfund “listing”, recharge transactions; huge holders manipulate the price soar, attract more funds to enter after selling, “harvesting” investors’ hard-earned money.

Dog coin, cat coin, pig coin, eel coin ……

The “air coins” are like air, invisible and untouchable, without physical support and without application value.

This is a very good way to get the most out of your business.

In addition, the existing judicial practice in China, virtual currency trading contracts are not protected by law, the consequences and losses caused by the relevant parties to bear their own.

In the interview process, the reporter was impressed by the words of Ms. Cao, a victim of fraud. She said, “I knew that investing in virtual coins was very risky, but what I thought at the time was that as long as someone bought in and I changed hands in the middle, I could always make money.”   

Some of the investors who were duped and harvested were driven by the high returns and deceived by the rhetoric, but there were also many who knew it could be a scam but were still willing to take the risk, hoping that they would not be the last one to “beat the drum”. It is in this “gambler” mentality that many investors fall step by step into the trap laid by unscrupulous elements.  

Therefore, in the series of reports, reporters often spend a lot of space to suggest the risk of virtual currency trading speculation, and painstakingly advise the public to stay away from “coin speculation” and establish the correct investment concept.  

It is gratifying to see that the reporters have received positive feedback from the netizens after the broadcast of the article. A lot of people say they recognize the risks of investment and will not venture into areas they can’t see or understand.

The high energy consumption “mining” can not be allowed to squeeze precious resources
The company’s main business is to provide a wide range of products and services to the market.  

Bitcoin and other virtual currencies do not have physical objects and are composed of a string of complex codes generated by computers, which need to be obtained through computer operations according to algorithms, commonly known as “mining”.

Virtual currency mining with the help of computer computing, used for mining “mining machine” to have a very strong data processing capabilities, generally larger power.

The “miners” in order to dig out virtual currency for money earlier, will be many many “mining machines” together to form a “mine”, day and night to dig, so the power consumption is huge.

On May 26, the reporter visited the exterior of a “mining site” plant. It is called a “data center”, but it is a “mine”.

How much electricity is consumed by the “mining site”? We must go to the field to find out. But an unannounced visit to such a “mine” hidden in a deep mountain valley requires courage and vigor.  

From Kangding City, Sichuan Province, Guzha town by car, driving through a map of the dirt road, the reporter finally arrived at a “mine” on the riverbank.

Simple plant, rows of large iron shelves, high-speed “mining machine” emitting a wave of heat, the fan’s loud roar even over the rapid flow of water not far from the Dadu River tributary Barang River.  

By talking to a few local Kanding operation and maintenance personnel, the reporter learned that the company, in the name of “hydropower consumption” and under the banner of “data center”, is actually engaged in The company is actually engaged in virtual currency mining activities. The company has more than a dozen mining sites in the western Sichuan region.  

As the research becomes deeper, the power consumption of the “mining site” is more and more breathtaking to the reporter: some “mining sites” consume millions of degrees of electricity a day; a “mining site” in a western province can “eat” 45 million degrees of electricity a month; a “mining site” in the southwest consumes electricity equivalent to the total electricity consumption of three cities a year; global bitcoin mining power consumption is equivalent to the power consumption of some medium-sized countries ……

On May 26, the reporter saw a “mining farm” in a western province, each room was filled with “mining machines” on metal racks, with fans roaring at the scene and the outside of the chassis full of dust.

Such a large power consumption, neither support what real industry, nor output what real value, not to drive employment and tax revenue. The reporter visited a company claiming to be engaged in “data business”, but in fact mining, the average monthly power consumption last year was as high as 25 million degrees, but the annual tax payment was only 250,000 yuan, and only a few workers were seen in the large factory.  

In China, bitcoin and other virtual currency trading platforms have been gradually purged in 2018, but for mining behavior, when the regulation did not clearly carry out crackdown and governance work, nor did it encourage.  

In the reporter’s impression, the attitude of the local government towards “mining” in the early years was not the same. Some are obviously “unwelcome”, some remain on the sidelines, as long as the “mining” does not violate the financial business, not involved in money laundering activities, not “steal electricity”, it will be allowed to operate.  

Some “mining” in the name of “hydropower consumption”, under the guise of “blockchain” “big data” engaged in virtual currency mining activities, and even entered the “hydropower consumption industry demonstration area” in some areas, becoming hydropower consumption “demonstration enterprise”.  

Why is Xinhua News Agency focusing on the "cryptocurrency circle"?

The reporters visited the “mining site” on May 26, some equipment “wreckage” was randomly stacked in a corner of the hall.

As virtual currencies proliferate, the power consumption of mining is also exploding, which brings huge pressure on China’s energy supply. The high energy consumption of virtual currency mining has caused local governments to be highly alerted. Since this year, Inner Mongolia Autonomous Region has taken a number of policy measures to clear out virtual currency mining projects, and by the end of April had shut down and retired 35 mining enterprises.  

This time, both national and local governments have sent out clearer and stronger signals.  

On May 21, the 51st meeting of the State Council’s Financial Stability Development Committee clearly proposed to crack down on bitcoin mining and trading.

Cracking down on virtual currency mining not only requires local governments to take the initiative to issue a document calling a halt to mining practices and cutting off incremental volumes; it also requires the introduction of comprehensive measures including electricity prices, land, taxation, environmental protection and other aspects to promote the orderly withdrawal of stockpile enterprises.

Can not relax the fence of the system
“Since China has purged the virtual currency trading platform, why are there still so many people mixed up in the ‘coin circle’? It does not seem to have delayed the speculation of coins.” Netizens often send similar questions in their comments on the draft.  Back in 2013, the People’s Bank of China and five other departments issued a clear document that required financial institutions and payment institutions not to conduct business related to bitcoin. In other words, since then, bitcoin cannot be converted into RMB, nor can it be used for payment settlement. So, how do the large amounts of virtual currency mined by domestic “mining farms” realize and keep their businesses running? How are the virtual currencies of domestic investors on offshore trading platforms recharged and withdrawn?  This shows that some financial institutions and payment institutions have not strictly implemented the relevant requirements, leaving opportunities for virtual currency trading platforms to take advantage of. In the interview, many experts expressed concern: will the speculative risk of virtual currencies such as Bitcoin be transmitted to the financial system ……

Recently, the China Internet Finance Association, the China Banking Association and the China Payment Clearing Association jointly issued an announcement that once again clarified that  

Financial institutions, payment institutions and other member units shall not use virtual currencies to price products and services, underwrite insurance business related to virtual currencies or include virtual currencies in the scope of insurance liabilities, or provide other services related to virtual currencies directly or indirectly for customers. Internet platform enterprise members shall not provide network business premises, commercial display, marketing and publicity, paid diversion and other services for virtual currency-related business activities.

While it is important for the association to speak out and guide its members to strengthen their self-discipline, it is more direct and effective for the regulator to take timely action. Some people suggest that the regulator should increase disciplinary action against institutions that provide services in violation of the law, to make an example of the chicken.

Why is Xinhua News Agency focusing on the "cryptocurrency circle"?

In fact, it is not only financial institutions that should not provide support for virtual currency trading speculation activities. At present, the packaging propaganda of investing in virtual currency “a million dollars” and “overnight riches” can be seen everywhere, video sites, group chat and posting bars have the so-called “big V” to attract traffic, the circle of friends have The “senior people” teach “speculation” experience, the foreign platform App can operate smoothly in the domestic trading ……

The regulation of virtual currency trading speculation activities, not a single department of a single regulation, but to comprehensive measures. The relevant departments should be involved according to their respective responsibilities to implement functional regulation.  

If only virtual currencies such as bitcoin are bought and sold as virtual commodities, the general public has the freedom to participate in the transaction at their own risk.

But if the virtual currency is packaged as a speculative speculation target, attracting investors to the trading platform, it is necessary to tighten the fence of the system and protect the interests of the people.  

The virtual currency surge and plunge continues, and no one knows when this “roller coaster” will reach its end. However, through a series of investigation reports, if more and more people can stay away from the risks of the “coin circle” and put on the “brakes” in time to prevent further transmission of risks, it will also realize the original intention of Xinhua News Agency to keep an eye on the “coin circle”. If we can keep more and more people away from the risks of the “coin circle” and put the brakes on in time to prevent further transmission of risks, we will have achieved the original purpose of Xinhua News Agency to keep an eye on the “coin circle”.

Planner: Zhao Cheng   

Producer: Hu Qinghai   

Co-ordinator: Wang Min, Zhao Xiaohui, Wang Yu

Reporter: Wu Yu, Chen Jian, Mao Zhenhua, Wang Chen Yang, Zhang Yunlong  

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-is-xinhua-news-agency-focusing-on-the-cryptocurrency-circle/
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.

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