News is circulating over the internet that the Chinese government might impose a ban on Bitcoin mining. Yes, you heard it right, the second largest economy of the world, China mostly to ban Bitcoin mining.
Bitcoin, the number one cryptocurrency will be banned from mining, and the five reasons that Bitcoin enthusiast should know are highlighted in this article.
Reason 1: Unsuccessful deal
There are many bloggers who are informing the readers through a blog post about their opinion as a ban on Bitcoin mining is expected to happen. However, the truth is that the Chinese authorities are seriously examining the project and reviewing it. The decision is not officially announced, just rumors that are going across the internet.
Reason 2: Ban is not accidental
Chinese miners read the handwritten note on the wall that was published by the Chinese authorities at the time when Beijing introduced a ban in late 2017 on buying and selling of bitcoin.
Most of the miners after that note found out that they could be the next to be targeted by the government. Due to this, major Chinese based mining firms should hold emergency alternative plans in place to shift their operations to relevant authorities.
Reason 3: The Bitcoin Protocol will not be affected
The Bitcoin protocol does not specify that Chinese traders should have a presence in Bitcoin mining and it is nowhere mentioned. Neither does the community is conditioned to any individual entity securing the network through Proof of Work.
On the other side, Bitcoin was designed as an open-ended system that enables anyone with the source to act as a validator to accomplish this.
Nevertheless, even if Chinese miners are allowed to close, they will be mostly changed by others. Apart from this, those miners who stay in the game will be benefited from Bitcoin mining, and this will be due to the smaller competition.
Reason 4: Possibly better for decentralization
Most of the mining resources known as hashrate are under the control of Chinese miners. A very small amount of Bitcoin miners manage them within China, this is one of the concerns that might harm the decentralization which the bitcoin is commonly known for.
If others have a better competing opportunity with the leading mining companies in China, then this will surely boost BTC decentralization.
Reason 5: Crypto winter of 2018 is compared with Peanuts
Experienced miners were not responding to shocks, Bitcoin prices were down by 85 percent during the 2018 bear market. However, Beijing imposing a ban on Bitcoin might be less effective in comparison to the bear market.
More explanation is given in 23-page report. The report is widely appreciated. The report now has a specific combination of trends which indicates the maximum change in the crypto market.
There are three unique combinations of trends which are included in the report. These trends mention that popular cryptocurrencies have greatly enjoyed the change in adoption, mostly in their on-chain transaction. In the previous year, the transaction volume of bitcoin has increased by more than three folds. Popular technological industries have made enhancements from Proof of Work to Proof of Stake.