China Might Ban Bitcoin Mining (UPDATED)

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China’s country planner, the National Development and Reform Commission, is seeking public opinions whether Bitcoin mining needs to be immediately prohibited, Reuters reported, citing the Commission. (Updates during the entire text.)

Bitcoin mining was included in a draft list of industrial activities the bureau is seeking to prevent, since they did not adhere to applicable laws and regulations, were dangerous, wasted polluted or resources the environment, the report said. The public can comment on the draft until May 7.

Chinese miners are important players in the Bitcoin mining industry. For instance, in the time of writing, two biggest mining pools – BTC.com and AntPool (both owned by Chinese mining hardware giant Bitmain) – grip nearly 32percent of the Bitcoin system hashrate, which essentially measures how much computing power is required to maintain the network.

Hashrate distribution

China Might Ban Bitcoin Mining (UPDATED) 102Source: blockchain.com

If the new rules are enacted and Chinese miners will be made to proceed to foreign countries, “Bitcoin mining will no longer be dominated by China but become more decentralised,” Michael Zhong, a analyst with Beijing-established cryptocurrency research firm TokenInsight, has been quoted as saying by South China Morning Post.

“If this ban does end up happening its more likely to push BTC prices up than down. The loss of cheap Chinese electricity would raise the mining cost, which is net positive on price. It would also serve to kill the FUD that Bitcoin mining is centralized,” Mati Greenspan, senior analyst in social trading system eToro, tweeted.

Following the information, Bitcoin is 0. 29percent in the previous hour (07:16 UTC) and is down . 19percent in the ago 24 hours.

The proceed by the Commission marks growing government pressure on the cryptocurrency sector.

One year before, articles from influential state-run media outlets signaled that further crackdowns may be started to force out remaining cryptocurrency trading and mining activities out of the country.

However, until today, miners have demonstrated a surprising resilience. Moreover, the upcoming rain period in China must once again bring low electricity prices revitalizing the crypto mining industry.

Nonetheless, a lot of these mining companies were looking to relocate to more favorable locations overseas for example Iceland, Canada, and the US, to mention a couple.

Also, there are worries which China retains more influence over Bitcoin than most are prepared to admit.

China”threatens the security, stability, and viability of Bitcoin” with its”political and economic control over domestic [cryptocurrency] activity, and management within its internet infrastructure,” a research, published in October 2018, from Princeton and Florida International Universities claimed.

“If the Chinese government assumed control of domestic hash power, this property would grant them an advantage in selecting blocks for the ledger, which is important for some types of attacks,” according to the research. It defined four strike courses: censorship, deanonymization, weakening consensus, disruption to competing mining operations. In complete, the academics identified 19 different strikes available to Chinese mining pools.

“In theory it’s possible for a government to launch a 51% attack. If a government like the US or China decided they wanted to hurt Bitcoin, they could either rapidly shut down a lot of mining power so that they control a majority of what’s left, or they could deploy new hashpower that takes over the network,” Prof. Matthew Green of John Hopkins University advised Cryptonews.com recently. However, he does not respect a 51% assault on Bitcoin as especially likely however, because of the enormous cost involved.

“The thing to keep in mind is that 51% attacks, while they’re terrible and undermine confidence, basically just allow double spending,” states Green. “This is really bad for merchants and exchanges, and in the long run it could make Bitcoin unusable. But it doesn’t allow the attacker to, say, steal everyone’s coins. And the cost of a rollback goes up as you go farther back in time.”
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Crypto Twitter:

Yep. Sichuan, Yunnan, Inner Mongolia.

— Mydas Ke (@MydasKe) April 9, 2019

“China says it wants to eliminate bitcoin mining”Number Bitcoin Fud pic.twitter.com/t11kNWD695

— WhalePanda (@WhalePanda) April 9, 2019

It only means that many of the hashpower will proceed across a boundary, a few will go “underground” in China, tucked into backrooms of older factories. Cost of coin production might appear, but it does not impact coin price in any way.

— Emin Gün Sirer (@el33th4xor) April 9, 2019

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