China is a country made of discipline and extreme culture. The country does not allow foreigners and their companies to flourish in order to nurture the homegrown companies. The country allows the homegrown companies to have a chance as the regulations are so strict, it is hard for foreign companies to enter and flourish in the world’s second-largest economy.
That said, bitcoin is also something the country is looking to get rid of but not entirely. The company is looking to stop the mining process which uses tons of electricity and is a method which is hard on computers as well. China is the largest market for computer hardware is facing this problem a lot and that is the reason why the country is trying to ban Bitcoin mining.
NDRC, the National Development and Reform Commission said that cryptocurrency mining should be totally banned and by cryptocurrency, it meant all kinds of currencies that need mining. The reasons for the same were also disclosed by the organization. The reasons mentioned were that it is unsafe to mine cryptocurrency, it goes totally against the laws and regulations which is enough reason to ban it and thirdly it is waste of resources along with polluting the environment.
That said, there was no deadline, mining of bitcoin should be stopped immediately according to NDRC. The move has layers to it and it is not only those reasons that the country has decided to stop the same. China wants to reboot the entire system of cryptocurrency in China. It wants to start afresh and that is the reason this step is being taken. Apart from that, there are many layers of bitcoins being formed, China wants to grab hold of the growing cryptocurrency. That being said, the decision is not so bad as it might just make China understand and get hold of something that might rule the world one day.
Meanwhile, Jehan Chu, Managing Partner at Kenetic, which is a blockchain investment firm, said that NDRC’s move is as expected and is in line with its desire to control different layers of the same. He said, “The NDRC’s move is in line overall with China’s desire to control different layers of the rapidly growing crypto industry, and does not yet signal a major shift in policy. I believe China simply wants to ‘reboot’ the crypto industry into one that they have oversight on, the same approach they took with the Internet.”
Bitcoin reached an all-time high after its bubble in 2017. The price increased by 20% last week and crossed $5000 for the first time since 2017. That being said, it is in people’s interest to mine bitcoin and there will be other ways used, the Chinese authorities will have to be careful with that as well.