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Bitcoin Mining

China government deepens crackdown on Bitcoin mining

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The province of Hebei, in China, which is 300 km from Beijing, is the latest region to create crackdowns on cryptocurrency miners, and it has already started at home. The Network Security and Information Technology Commission, led by the local Communist Party, has given until the 30th of this month for all government departments to check their systems and end any link with “illegal” mining activity.

As announced by the Commission on Network Security and Information Technology in its account, “The mining of cryptocurrencies consumes an enormous amount of energy, which is in line with China’s targets for carbon neutralization,” says a statement on WeChat, according to a Reuters post on Tuesday (14).

The organization also added that the activity entails enormous financial risks and that the next step will be to gather information and complaints from the general public. And he stated that from October onwards he will both begin to regularly monitor the sector and punish those who break the rules.

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The repression actions in Hebei already have the help of several departments, such as Education, Public Security, Administration and Communication. The agency that oversees the local financial market also joined the initiative.

China’s crackdown on miners

The crackdown on bitcoin miners in China has been growing since May this year, when China’s State Council showed its negative stance on the activity. It was the first time that a high Chinese government body discussed the crackdown on mining and bitcoin trading in the country.

After that, several cities started to mobilize against the miners, who started to turn off their equipment and even leave the country. The cryptocurrency industry, then, came under heavy repression from entities linked to the Chinese government.

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In June, exchanges such as BTCChina and Okcoin — two of the oldest in the country — closed their doors. Bitcoin mining companies HashCow and BTC.TOP also suspended activities; others suggested that they would leave the country.

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Bitcoin Mining

Mclouds Cloud Mining Giant to Stop Operations in Mainland China by Dec 31

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Mclouds have announced they will be withdrawing from China by the end of December this year

Chinese blockchain news outlet 8BTCnews has tweeted that one of the biggest miner hosting company in China, Mclouds, will be shutting down their services for customers in mainland China and will withdraw from the region by December 31.

Another large miner leaving China

Source cited by 8BTCnews says that today, on October 18, Mars Cloud Mine, that is part of Mclouds giant, announced that it will be withdrawing mining assets and services from mainland China before end of December, following the recent ban on crypto mining activities and crypto transactions in the country.

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The platform provides solutions for Bitcoin and ETH mining, as well as for Filecoin.

China is cracking down on crypto mining again

As reported by U.Today previously, China had imposed a new ban on cryptocurrency mining and trading, announcing all crypto transactions in the country illegal.

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Multiple crypto exchanges are withdrawing, relocating from China or are shutting down their business completely.

The same is happening with mining pools. Bitmain miner creating giant has announced that it will stop providing mining machines to its customers in mainland China. One of its major mining pools, BTC.com, has followed the suit and another mining giant Antpool has suspended access to its services from Chinese IP addresses.

The US surpasses China by Bitcoin hashrate

The US has now officially become the top destination for miners leaving China, according to CNBC. As per the article, the leadership of the US for miners has drastically increased by 428% since September last year.

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A fintech expert from the London, Boaz Sobrano, cited by CNBC, said that the times when China controlled the lion share of Bitcoin hashrate are behind. The US has now taken its place.

Some miners are also fleeing from China to Kazakhstan, however, experts believe that this is just a temporary stopover for them.

Energy provided by this country is coal-based and next year the local government plans to impose taxes on crypto mining companies.

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Fifth largest bitcoin mining pool abandons China because of crackdown

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BTC.com, one of the largest bitcoin mining pools, ranked 5th in hashrate, starts leaving the Chinese market from this Friday (15th), as announced by its operator, BIT Mining, a company listed on the Stock Exchange of New York. According to the official note published on Thursday (14), the reason for leaving the Asian country is to comply with local regulations.

“BTC.com will discontinue registration of new Mainland China users and expects to begin canceling existing Mainland China users’ accounts in an orderly manner from October 15, 2021,” says the statement from BIT Mining.

Also according to the company, the discontinuation of the BTC.com service for users in China should impact the company’s revenue. That’s because the subsidiary is a business conglomerate such as pool, browser, cryptocurrency merchant.

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The company concluded by stating that BTC.com recently signed a contract to acquire a mining machinery manufacturer with the aim of increasing its self-sufficiency and strengthening its competitive position. BTC.com is responsible for 9% of all bitcoin mining; in 2018 it came to lead the sector with 28.2% of the network’s total hashrate.

Antpool will no longer serve China

Also on Wednesday, Bitcoin hashrate giant Antpool warned the Chinese market that it would no longer offer its services. As of this Friday, the note says, the company begins a transition to “complying with relevant Chinese government regulations” and ordering its global customer base. For this, the company published the first two measures:

Online KYC (Know Your Customer) verification system, global authentication of registered users to help users comply with the laws and regulations of their location; And the blocking of IPs from China, with the exception of Hong Kong and Taiwan.

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Cryptocurrencies in China

Last month, the Chinese government started a new wave of crackdown on cryptocurrencies in the country, continuing the bans it has imposed on the sector in the past, banning mining, trade and access to the financial system of intermediaries.

With the imposition of the Chinese government, at least four of the largest mining companies operating in the country have already left the Asian region — Bee Pool and Spark Pool, respectively fourth and second largest mining pool in Ethereum, until then, had been the last to decline the doors. Now, the country’s judiciary is studying how to prosecute and sentence users of cryptocurrencies.

The action of the Asian country causes miners to migrate to the United States and other countries in the West. In fact, according to a recent Cambridge University study, the US has become a global leader in the Bitcoin mining industry.

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US Takes the Top Place as Bitcoin Mining Destination Eclipses China

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  • The US took the top place for bitcoin mining destinations.
  • According to Cambridge Center for Finance, one-third of the bitcoin hash rate is in the US.
  • The four states in the US have the highest bitcoin hast rate distribution.

Early Wednesday, Cambridge University released data showing that the US now is the number one destination for bitcoin miners. In fact, this is the first time the US beat China.

According to the Cambridge Center for Alternative Finance report, 35.4% of bitcoin’s hashrate of the collective power for miners is in the US. That was a remarkable 428% increase from September 2020.

In addition, four states in the US have the highest bitcoin hashrate distribution. Notably, most bitcoin miners are led to New York, Kentucky, Georgia, and Texas. However, numerous states with the highest bitcoin hashrates also have high proportions of renewable energy. This fact may have caused changes in the story of people saying bitcoin is bad for the environment.

Furthermore, many miners are moving to those states because they offer cheap and renewable sources of power. For example, data from the US Energy Information shows that a third of New York’s in-state generation comes from a renewable source.

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Kentucky had the second-highest hash rate. It is also known for its hydroelectric and wind power. Besides, the State government recently passed a law that grants certain tax exemptions to crypto mining operations.

Although Texas was placed fourth, experts believe it is the top mining destination in the US. Moreover, the states line mining giants like Riot Blockchain and the Chinese mining service platform Bitdeer.

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