Bitcoin (BTC) prices fall due to Chinese cryptocurrency mining crackdown

August 12, 2016, Bitcoin mine near Kongyuxiang, Sichuan, China.

Paul Ratchet | The Washington Post | Getty Images

Bitcoin It sank on Monday with reports that China has tightened its crackdown on cryptocurrency mining.

The world’s largest digital currency fell 7% to $ 32,801 on Monday morning, falling below $ 33,000 for the first time since June 8, according to Coin Metrics data. The last transaction was $ 33,243 at 5:50 EST.Small rivals like ether And XRP It also fell by 8% and 7%, respectively.

Many Bitcoin mines in Sichuan were closed on Sunday after authorities in southwestern China ordered the suspension of cryptocurrency mining. report From the newspaper Global Times supported by the Communist Party. According to the newspaper, it is estimated that more than 90% of China’s Bitcoin mining capacity is closed.

Bloomberg And Reuters He also reported on the relocation from the Sichuan provincial authorities.It follows a similar development in China Inner Mongolia Not only in the Yunnan area Beijing calls for the abolition of cryptocurrency mining In that worry Large amount of energy consumption..

Apart from this, the central bank of China Said on monday Alipay, a payment service operated by Alibaba’s affiliate Ant Group, has been summoned, and some major banks have urged crackdowns on crypto trading.China had Already banned Because financial institutions provide cryptographic services.

Bitcoin’s hash rate (or processing power) seems to have dropped significantly due to the crackdown in China, but according to last month’s data, this has dropped sharply. An estimated 65% of the world’s Bitcoin mining is done in China.

The Bitcoin network is decentralized. That is, there is no central party or intermediary to approve transactions or generate new coins. Instead, the blockchain is maintained by so-called miners competing to solve complex math puzzles using a dedicated computer to verify transactions. Anyone who wins the race will be rewarded with Bitcoin.

This power-intensive process raises concerns about the potential environmental harm of Bitcoin. Tesla CEO Elon Musk To the US Treasury Secretary Janet Yellen Issue an alarm.. China, where most Bitcoin mining is concentrated Relies heavily on coal-fired power.. Last month, a coal mine in Xinjiang Uygur Autonomous Region was closed due to a flood, and almost a quarter of Bitcoin’s hash rate went offline.

However, Chinese miners often migrate to places like Sichuan, where hydropower is plentiful during the rainy season. And several industry initiatives have been launched to reduce the carbon dioxide emissions of cryptocurrencies, such as the Bitcoin Mining Council and the Cryptocurrency Climate Agreement.

Bitcoin (BTC) prices fall due to Chinese cryptocurrency mining crackdown

Source link Bitcoin (BTC) prices fall due to Chinese cryptocurrency mining crackdown

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