Bitcoin is the first blockchain technology success

A few years back, in China’s there are three main bitcoin trading platforms which are BTC China, Okcoin and Huobi. They are accounted in most of trading in China.

It is well known that the sector was not regulated, and the transactions were under the radar of the authorities. For that reason, the government closed the cryptocurrency exchange platforms in 2017. 

On the other hand, the pound that is scheduled to be launched next year will allow you to buy goods and pay as easily as send an instant message. This currency, like bitcoin, “represents a danger to the yuan” at a time when Beijing is worried about stabilizing its currency, says Song Houze , of the MacroPolo reflection group, specializing in the Chinese economy.

The statement of the birth of the pound is an “attentive” for Beijing, according to an exalted central bank official citation in the Chinese press. He explains that it could shock the international financial system.

Bitcoin in China has been one of the engines of cryptocurrency growth, but the country has restricted its activity.

History of Bitcoin in China

The history of Bitcoin cannot be understood without the momentum of mining in China. This virtual currency became an industry in itself in a country with cheap space and computing. Among the qualities of the Asian country are a vast extension and an enormous capacity for manufacturing electronic devices. Among them, computers and servers are products whose manufacturing is highly industrialized at this point.

Also in China there is money and enthusiasm for any technological trend of the moment. So some companies and entrepreneurs decided a few years ago to create server farms for one purpose: mining bitcoins.

Bitcoin became a global trend in 2017, when its price rose from a thousand dollars to practically 20,000 dollars . He did it because he attracted investors and speculators from all corners of the financial markets. The opportunity to earn money in those months, despite the risk, transcended this field of finance to reach the general public. The media began to dedicate time and space to this cryptocurrency and others whose value was traced by the most famous of all.

This is when the first big blow to Bitcoin arrived in China. The People’s Bank of China (the central authority) announced, when the value of the cryptocurrency had skyrocketed, its intention to close the platforms where bitcoins were exchanged for real money. It was the first symptom that China did not agree with the drift that the cryptocurrency took.

However, before this, nothing had been done from the Chinese authorities to discourage the mining of bitcoins or transactions. Server farms that were installed in the Asian country had grown to form large businesses. Also, however small their contribution was, these companies added to the country’s production, as they demanded server equipment, storage, network equipment …, increasingly.

China gets tired of Bitcoin

But when the price of Bitcoin increased too much, authorities began harassing this cryptocurrency . For the People’s Bank of China the fact that the capital of citizens and national companies could be changed to bitcoins was a risk. Such a volatile currency could vanish the value of Chinese private capital when there was a downward shift.

On the other hand, Bitcoin does not allow the control or protection of any economic authority. Its decentralization makes it uncontrollable in this regard, which, on the other hand, adds greater volatility. None of this sounded attractive.

So the country was favorable to measures that could curb Bitcoin in China and other cryptocurrencies. ICOs (a kind of IPO in the cryptocurrency market) were banned and measures were proposed to restrict energy consumption, which is essential for mining farms.

At the moment, China is considering nothing less than banning the mining of bitcoins. For now it is only a proposal, but the legal text that would authorize the ban is in the hands of the authorities.

If the veto is carried out it will mean the suppression of a small industry that was born and grew in the heat of a virtual currency. And it will also be the end of the close relationship between China and Bitcoin.

Leave a Comment