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China Plans To Kill Most of the World's Bitcoin Mining Operations (bloomberg.com)
The Chinese government will end bitcoin mining operations in the country in the coming months in a move that could have a massive impact on the price of the world's biggest digital currency. From a report: China has been a central player in the development of bitcoin in recent years, but Beijing has spent the last six months cracking down on the cryptocurrency industry -- shutting down local exchanges and banning initial coin offerings. Leaked documents suggest the Chinese government plans an "orderly exit" for bitcoin mining operations in the coming weeks and months. In the documents, issued to the local offices of the internet-finance regulator, authorities were instructed to force mining operations out of business using measures linked to electricity pricing, land use, tax and environmental protection.
Given that bitcoin relies on mining to certify transactions, I suspect that the direction of impact could be rather surprising to some of those who believe in scarcity driven theories of economics.
Ain't no such thing as an orderly exit from a bubble. Bubbles are driven by speculative demand, people trying to make a profit by selling it to others for higher prices. People ain't in it to buy and hold. So there's going to be no price stabilizing until the speculators leave the market.
The slope of the price curve is going to be high on the upswing or the downswing. A government has two choices: inject money into the market, pumping it up, again attracting speculators. Or standing back and letting it reach organic market value.
Wasn't bitcoin always one big cluster due to the fact it eventually takes the power output of nuclear plants just to mine new coins. An activity which consumes vast physical resources for no tangible benefit, which makes the interest rates of the banking system look very reasonable in comparison. I am sure that the fact that it consumes vast resources and stressing infrastructure on something with no tangible value to society is a part of the reason China is taking it off line. A lot of hype over a fundamentally broken model, that is really not a currency anyway, but a wildly fluctuating and unstable mess, any real currency that acted this way would be a laughing stock.
The mining pools are run out of China. The physical location of the devices doing the hashing is wherever the electricity is cheapest. For example, people heat their homes in Quebec with electricity so some are mining there now and heating with the waste heat.
The mining equipment won't vanish. If you have sunk the cost of buying the equipment, you won't turn it off because electricity got more expensive. Right now $1 worth of electricity gets you about $10 worth of crypto currency. If the price of electricity goes up 9x it still will make sense to mine. It just won't make sense to buy new equipment.
Transaction times won't be affected. The total hashing power won't decrease. It's rate of increase might slow. BUT, even if the total hashing power fell, the currencies have what is called a difficulty level. That will decrease and a currency like bitcoin will continue to create a new block every 10 minutes.
Huge mining operations are already up and running, and more planned, in Canada, Iceland, Sweden and Russia. This will not disrupt Bitcoin.
https://www.hiveblockchain.com...
it's in my head
We know you do. We also know you're not smart enough to make the connection between authoritarian government and lack of free speech, which is why we don't allow you to prevail.
Maw! Fire up the karma burner!
...authorities were instructed to force mining operations out of business using measures linked to electricity pricing, land use, tax and environmental protection.
Let's all welcome China to the First World! We're going to redefine the phrase to include them now. How very American of them, to use electricity pricing, land use (zoning), taxes, and environmental protection regulations to crush something they don't like. We're so proud of them.
Being a capitalist dictatorship sure sounds so much better than being a communist dictatorship, don't you think? Remember kids, it's not an edict from the Powers That Be. It's just a change in zoning. Nothing to see here.
The biggest, and maybe only problem that will arise will be the difficulty being too high when they shut down the farms, leading to a period of slow block solves until the difficulty adjusts. The network will work just fine without the chinese mining farms
And the blockchain network will be more secure. Bitcoin has deviated from its original design in two ways and both compromise blockchain security. First, miners are no longer a diverse group of ordinary users and their personal computers, mining is dominated by a relatively small number of ASIC farms. This makes 51% attacks more plausible, we had one pool get to 50% a few years ago. Secondly, ASIC mining is concentrated in a single country, 70% of the hashate give or take. This obviously destroys the notion that bitcoin is beyond government meddling. These ASIC miners are dependent upon cheap government controlled power.
It sucks to have invested money in ASIC hardware and colocated you gear there but this move would help to get bitcoin back on track. Hopefully closer to the globally and widely distributed mining that is necessary for blockchain security, something we do not have today.
If you want to get in on the cryptocurrency mining scene ...
Stop yourself, don't do it. Take either of these two paths:
(1) You were going to buy a GPU anyway for some non-mining reason. Go ahead, buy the GPU. Maybe, **maybe**, buy a model up one level of performance/price from what you would have otherwise bought, if its a low to midrange model. Say if you were otherwise planning on a GTX 1050 Ti 4GB ***maybe*** get a GTX 1060 6GB, ****maybe****. If you were otherwise getting a high performer, say a 1070 Ti for that 4K monitor, do *****not***** go up a level to a 1080 Ti. Then let the GPU mine when you are not using the machine. Use a watt meter to determine the total power consumption of your machine to determine power usage, do *not* trust online references that say your GPU uses so many watts. When your GPU is mining other parts of the computer are also drawing power, especially the CPU which may also be mining. You want to know the total system power and make sure your mining proceeds exceed that amount. Be sure to use above baseline residential power rates in your calculations, do *not* just look at your current bill and expect the current rate. If it is not profitable to mine do *not* fall into the trap that "the coin price will eventually rise and make it profitable", that is a losing game. Instead, take whatever money you would spend on power and just buy the coins directly, you will have more coins that way if the price rises. But above all else, do not get into the mindset of joining the mining scene, that is a path to losing money. Stay in the scene "the GPU I have anyway can make some coin when I'm not using it".
(2) Take whatever money you were willing to spend on a GPU for mining and just buy coins with that money. You will likely do better that way if the price rises. Many miners fall into the trap that they are profitable and pat themselves on the back. They do not consider the opportunity cost of the alternative of just buying coins directly. The following are very rough estimates but the point will nonetheless be clear. Lets say you spent $500 on a GPU last summer and another $500 on a GPU last fall. At above baseline residential power rates maybe you have about an extra $1,000 after factoring in power. Congrats your GPUs are now paid. However your friend bought $500 worth of bitcoin in the summer and another $500 in the fall and now has $3,000 worth of bitcoin. You are at net $0, he is at net $2,0000. If you are willing to gamble on increasing coin prices you may be better off just buying coins directly. Things are not as simple as a mining rig being profitable, the opportunity cost of the just buy directly must be considered. Many other things must also be considered before joining the mining scene.
Yes, we're talking about the type of authoritarian government that locks up millions of citizens, often for political crimes such as using the wrong substances that the authoritarians don't like.
It's actually pretty common for a large percentage of the population to like the authoritarians, look at America where they keep actually voting them in.
https://en.wikipedia.org/wiki/Inverted_totalitarianism