Home Cryptocurrency China’s attempt to kill Bitcoin failed — Here are 3 reasons why

China’s attempt to kill Bitcoin failed — Here are 3 reasons why

by Serge Shlykov

Bitcoin is a digital currency that allows its users to make transactions without the risk of being scammed or stolen. Most people who use Bitcoin are either aware of how it works or think it’s just a scam.

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China is tired of people buying Bitcoin to avoid the turmoil it creates. So, to stop the activity, the country has begun a crackdown on Bitcoin. The government has issued a decree declaring that any business that uses the cryptocurrency is to be shut down by July 1, 2018. The move has been met with a great deal of criticism from the public, and has sparked fears that the government may be trying to kill Bitcoin.

In 2017, China’s big push to rid the world of cryptocurrency and blockchain companies and technologies came to a crashing halt. It’s hard to imagine what the world would be like today had China succeeded. One of the biggest problems the Chinese government faced was in clamping down on the popular practice of mining — an act that many believe was a key factor in attracting Westerners to Bitcoin in the first place. The story might have ended there, but some people believe the Chinese government may have gone a step further in trying to undermine the currency than just forcing its miners to stop their work. Getting rid of the miners would have been the number one goal of the Chinese government, but it seems they’ve yet to figure out how to do that. ~~. Read more about why did crypto drop today and let us know what you think.

Bitcoin (BTC) may have been the target of the biggest concerted assault in recent months, but the investment community refused to give up. After providing BTC miners two weeks’ warning, China officially banned mining in most areas, resulting in the single biggest mining difficulty adjustment as the network hash rate fell 50%.

The market’s perception of Bitcoin has already been tainted by Elon Musk’s announcement that Tesla will no longer accept Bitcoin payments owing to the mining process’s environmental effect. It’s unclear if Musk’s comments impacted or influenced China’s decision, but they certainly had a bad impact.

China banned bitcoin exchanges from online search results a few weeks later, on June 16. Meanwhile, Huobi, a Chinese futures market, has begun to limit leverage trading and has banned new customers from China.

Finally, on June 21, the People’s Bank of China (PBoC) ordered banks to shut over-the-counter desks’ bank accounts, as well as their social media profiles. Because the OTC desk serves as a fiat gateway in the area, it would be impossible to convert Bitcoin to stablecoins without them.

Some experts were hesitant to label the methods as nothing more than useless FUD as the events progressed, but in retrospect, it seems that China conducted a well-planned and executed assault against the Bitcoin network and mining sector.

Because of the recent drop in Bitcoin’s price and growing fears of a 51 percent hashrate assault, the short-term effect might be deemed a modest success.

I wouldn’t trust anything you hear about Bitcoin mining in China. I wouldn’t rule out the idea that China’s Communist Party is planning a 51 percent assault on the Bitcoin network. Maintain vigilance.

June 25, 2021 — Danny Diekroeger (@dannydiekroeger)

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Despite the tactics, China’s assault failed, and the following are the major reasons why. 

Hashrate has returned to 100 million TH/s.

The Bitcoin network hash rate, which is an indication of overall mining power, began to fall after peaking at 186 million TH/s on May 12. The first few weeks were hampered by limitations on coal-powered regions, which accounted for about a quarter of the mining capacity.

The indicator fell to 85 million TH/s, its lowest level in two years, as the restriction was expanded to additional areas.

The hashrate of bitcoin is approximated. Blockchain.com is the source for this information.

The Bitcoin network’s processing capacity returned to 100 million TH/s in less than three weeks, as seen by the statistics above. Some miners were able to relocate their equipment to Kazakhstan, while others relocated to Canada and the United States.

P2P (peer-to-peer) marketplaces continued to operate.

People continued to serve as intermediates despite the fact that businesses engaged in crypto transactions were banned from the nation; according to statistics from the exchange’s own rating system, some of these individuals logged over 10,000 successful peer-to-peer transactions.

China’s attempt to kill Bitcoin failed — Here are 3 reasons whyAdvertisement for Huobi’s global peer-to-peer market. Huobi is the source of this information.

Users may trade various cryptocurrencies, including USD Tether, on both Huobi and Binance’s platforms (USDT). Transacting on a normal or derivatives exchange becomes feasible after changing their money to stablecoin.

Spot volume is still dominated by Asian exchanges.

Binance, OKEx, and Huobi, which were formerly headquartered in the area, would most likely represent a total ban on trading from Chinese companies. However, based on current traffic statistics, there hasn’t been much of a difference.

China’s attempt to kill Bitcoin failed — Here are 3 reasons whyUSD weekly spot volume Cryptorank.io is the source of this information.

Take note of how the three ‘Asia-based’ exchanges continue to dominate, despite the fact that Coinbase, Kraken, and Bitfinex are nowhere near their trade volumes.

The restriction on Bitcoin mining and transactions in China may have caused some temporary delays and a drop in BTC price, but the network and price have rebounded far more quickly than many anticipated.

There is currently no method to monitor OTC transactions in which bigger blocks are exchanged, but it will only be a matter of time until these middlemen discover new payment channels and routes.

The author’s thoughts and opinions are entirely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.

China is trying desperately to ban Bitcoin, but it’s not having much luck. The crackdown on Bitcoin exchanges and mining operations in China has only seen the price of Bitcoin increase, and the country’s population is more worried than ever about the digital currency. Bitcoin has the potential to change the world, but it’s not the solution to today’s financial problems.. Read more about why did china ban bitcoin and let us know what you think.

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This article broadly covered the following related topics:

  • why did china ban bitcoin
  • what is wrong with cryptocurrency
  • why did crypto drop today
  • why is china anti crypto
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