Bitcoin mining has always been achieved at a huge environmental cost. Because of this, questions have been raised on whether it is really worth it and if there is any way of reducing this cost. Unfortunately, much of this remains unanswered. While most countries have chosen to turn a blind eye at Bitcoin, neither endorsing it or banning it, with every year and as digital assets become more popular, more countries are being forced into taking a position. China, which had earlier banned the purchase and use of cryptocurrencies, was a few days rumored to be planning a ban on Bitcoin mining.
This rumor caused an uproar in the crypto community given that China accounts for more than 50% of Bitcoin mining. According to one report published in 2018, China was linked to around 74% of Bitcoin mining. So, if the government was to ban Bitcoin mining, this could have some major implications.
Could This Be Good For The Long-term?
But though this would hurt the market for the first couple of weeks, with mining pools relocating to other countries, this could be a blessing in disguise. By scattering these mining pools, this could offer further decentralization of the network.
However, there is no immediate need for the pools to begin packing their hardware. China has not made a conclusive decision to ban Bitcoin mining. The country’s National Development and Reform Commission [NDRC] released a document (Catalog for Guiding Industry Restructuring) that mining was inefficient. The agency proposed encouraging or eliminating industry eliminating depending on its waste or benefit.
With mining, it is debatable whether the environmental cost is more than or less than the economic value of the practice. The government is now expected to make a decision about whether to suppress the mining industry or ignore the guide. But what is clear for now is that the country is not banning the practice and the NDRC document was misunderstood. Most analysts believe, they will not be banning Bitcoin mining. But for how long?
A recent Reuters report indicated that crypto mining was one of 450 activities that will be:
“phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment.”
Launch Of A Central Bank Cryptocurrency In 20 Years
While many countries have been speculated to be preparing to implement digital currencies to their national currency, none has taken this step. With China one of the countries that have banned cryptocurrencies, we do not expect it to be a leading candidate in this front. One analyst, however, believes that its central bank will implement cryptocurrencies within the next 20 years.
Tapscott said in an interview that though China had a complicated relationship with Blockchain technology and cryptocurrencies, fully endorsing blockchain and fighting cryptocurrencies, the government acknowledged its application. The only problem, for now, is hype, the government does not like hype investing, something that will change in a couple of years for cryptocurrencies. They can begin taking a more positive position and implementing cryptocurrencies.
Please subscribe to my profile and let’s catch up on the next piece.