No miners, no transactions. For a transaction from one wallet to another to be successful, it requires several computers to work out the mathematic. This solves the logarithm used when creating bitcoin for a safe encrypted and untraceable transaction. As a result, the computers; in this case, the miners, are rewarded with a very minimal percentage of the transaction for the work done. The PBoc does not help the case for bitcoin.
Usually, a transaction can take around two hours to be complete a single transaction. This is possible due to the high powered computers that work out the logarithm. This costs miners so much power to run the computers, so much that if bitcoin price Is below a certain amount, miners would be making losses as a result.
If a business is not making you any money, it shuts-down. With the recent halving, the reward for miners was cut by half what they used to get before. For mining to make any sense the bitcoin price will have to be priced double what it used to be worth when they made a profit before the recent halving. This is the only way to cover all expenses and facilitate some profit.
PBoC Does not make the situation any better
China is the leading county with the highest number of miners in the world. They facilitate about two-third of the total mining. In a report released by the People’s Bank of China, PBoC, blockchain investment has been considered dangerous and risky for fraudulence.
Basically the report word investors on the dangers of investing in blockchain schemes saying they are illegal fundraisers. Although the report does not specifically talk about the cryptocurrency specifically, the blockchains pointed out are similar to the ones used.
The report has outlined several signs of a financial scam. It wants investors to be cautious when getting to such deals. There are hundreds of millions of dollars lost this year alone from the bitcoin investors alone. Such schemes are part of what PBoC warned about.
If the bitcoin prices drop too much, there might be no miners to do the calculations. Consequently, if the computers are less than the work available, it would take longer to transact a single transaction.