In 2020, China was home to about 65% of the total bitcoin mining operations from the whole world. However, China is a centre of many technology departments to date but not bitcoin mining. In the year 2020, the government of China decided that cryptocurrencies are a threat to the financial system and the prosperity of the whole country.
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The first reason given by the country to ban the bitcoin system was a lot of energy consumption and carbon emissions. Due to this, the environment was suffering a lot, and therefore, it decided to ban cryptocurrency trading. However, it is not the least that China is looking forward to doing. According to the reports, China is also looking forward to bringing about its own central bank digital currency in the market that the bank of China will regulate.
In 2021, China was further looking forward to taking upon bitcoin. However, due to the increased mining operations in China, the government decided to take another step towards the country’s growth. They decided to ban the cryptocurrency mining operations altogether, and for doing so, the government imposed huge taxes on the companies. The companies involved in bitcoin mining were charged with many taxes on electricity supply. Also, any services provided to the mining companies were at high prices. It became a huge matter of concern operating in the mining industry. They could not cope with the taxes imposed by the government, so they decided to leave the country altogether. Well, have you ever wondered it could be a good thing for Bitcoin?
Let’s understand this in further detail. When China decided to ban the cryptocurrency mining operations completely, the companies had to shift their preferences to another country. For instance, most of the companies dealing in the bitcoin mining operations decided to shift their preferences of operations to Kazakhstan. It is because Kazakhstan was providing electricity at very cheap rates, and also, the main power supply was huge. Therefore, there was a lot of space where the companies could be set up, and therefore, it became a centre for the bitcoin mining operations. Today, 1/5 of the total bitcoin mining operations are taking place in Kazakhstan, and it is a significant participant in the total income for the country.
Effects of the ban on bitcoin
In the initial stages of the ban, the bitcoin mining operations decrease significantly and therefore, many miners have stopped their operations. However, this will not be a bad thing for the bitcoin network in the long run. When China banned the cryptocurrencies like bitcoin operations, the price of bitcoin also reached the highest price of $66,000 on October 20, 2021, visit at https://bitcoin-bot.app/. Also, in November, the prices were as high as $69,000, which is a very significant event for bitcoin. Therefore, it is entirely evident that even though the bank has affected bitcoin, it will not last long.
Earlier, there were complete from the bitcoin community that China is the centre of mining operations and therefore, the network is being controlled at that place. However, many things have changed because of the excellent mining migration of Chinese cryptocurrency miners. They monopolise the market which had its centre in China earlier is now distributed among different corners of the world. It has led to a bit of rest among the bitcoin community and says that the bitcoin network will have fair competition.
What does this ban mean?
China has been willing to ban cryptocurrencies and their mining for a very long period until 2021. However, they were not able to do so for many reasons. One of the main reasons is the high number of cryptocurrencies minus in the country. However, in 2021, all mining and trading operations stopped in China. Therefore, a lot of things have changed. The mining operations were forced to shut down in the country, and the Chinese miners had to pack up everything and shift to some other country.
It is considered a good move for the whole bitcoin community as many things are going to be better now. Due to the move of the Chinese government, a demographic change occurred for bitcoin. It was the largest one ever since the inception of cryptocurrencies, and it had led to a lot of uncertainty. However, things could be better in future because of this move of the Chinese government. When the mining operations are primarily western-oriented for bitcoin, the market is expected to be more liberal and have fair competition.
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