Shutting down Bitcoin mining facilities could cause 'severe economic problems'
China has been exhibiting its interest in blockchain technology and with the digital yuan, the country has surely turned heads. Apart from this, China has been dominating the Bitcoin mining space. However, the latest news from the country shows the ugly side of the same.
Recently, Chinese authorities have reportedly seized about 7,000 cryptocurrency mining machines for consuming electricity, illegally. Appearing in a recent interview, Ethan Pierse, Director at the CryptoAssets Institute, elaborated on the same. Pierse pointed out that what happened in China is not exactly a mining crackdown but just electricity theft. Despite, the fact that people have to register to use abundance electricity, the price of it in China is fairly low and people still choose to go around it.
Pierse added,
“People are going around that even still and tapping into electricity where they can and siphoning that off. So basically, they see that and monitor that there are weird peaks of electricity usage in places and they go and track it down. One miner’s using the same electricity as a single household or dozens of households.”
This further does not mean that they are shutting down crypto mining per se, but it is mostly about not paying for the electricity that they use, he added.
Furthermore, he pointed out that just four regions in China account for 65 percent of the world’s hash rate and Siachen alone is responsible for 50 percent. If China decides on a wholesale shutting down of network access, it would turn out to be problematic, Pierse added. While highlighting the fact that China controls more than half of the crypto mining in the world, he stated,
“If you’re basing your economy or if you’re tying any kind of monetary policy to anything whether it’s Bitcoin or eventually other things and the mining of that particular cryptocurrency is controlled this much by another government, more or less their ability to shut that down in and of itself can cause severe economic problems for governments or large corporations or other platforms that are leveraging this.”
This further sheds light on what could happen if China did do something like this. The problem of having most of the hash rate focused on a single place and for that be removed and not manipulated could have its effects on the availability of the network, Pierse suggested.
Keeping in mind the same, he hopes to see more mining facilities across the globe.
OhNoCrypto
via https://www.ohnocrypto.com
Sahana Kiran, Khareem Sudlow