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Bitcoin is a proficient digitalized with a plethora of features, the utmost dazzling feature of bitcoin is the existence of a blockchain.
Bitcoin is a scalable protocol on blockchain technology; the core notion of blockchain technology basically renders the information regarding bitcoin transactions, including four other components of that explicit transaction. Bitcoin is the scorching headline across the globe due to the involvement of several renowned personalities in bitcoin.
The groundbreaking bulletin arrived that china has announced the cryptocurrency crackdown in the country. The crackdown primarily concentrates on banning bitcoin and other aspects of bitcoin, almost every crypto watcher and enthusiast is familiar with the fact that bitcoin is banned in China, but only a few individuals are actually familiar with the reasons behind the entire action.
The announcement of cryptocurrency crackdown in China has declined the value of bitcoin to an exceeding extent alongside other altcoins. Bitcoin tumbled by more than 30%, whereas Ethereum fell more than bitcoin in terms of percentage. All the more announcement jointed committee of china have correspondingly declined the market cap of bitcoin. If you want to invest in bitcoins, then you should know the uses of bitcoin
The fact might amaze you that the bitcoin ban led to a loss of more than 100 billion USD in just a week. Below mentioned is a complete set of reasons why china has announced a cryptocurrency crackdown in the country.
China Announced Cryptocurrency Crackdown!
China was claimed to cause a market crash in the cryptocurrency industry back in 2014 and 2018 as china announced a ban on finical institutions accepting bitcoin as a payment method. However, the ban was lifted by higher authorities of china itself, so it is not the foremost time that china has announced the ban on bitcoin, which means there might be a probability of reversal on the bitcoin ban.
On the 18th of May 2021, China announced a cryptocurrency crackdown in the country. The crackdown was correspondingly complexed majorly on bitcoin as the crackdown includes halting bitcoin mining, trading, and all the more holding bitcoin as an investment asset.
The crackdown basically concentrates on financial institutions rendering services regarding bitcoin and another cryptocurrency. Moreover, no bank is now allowed to accept bitcoin as a payment method, as there are civilization terms for such cases as per the statement jointed committee.
The announcement of china led to a cryptocurrency market crash which created an exceeding extent of chaos in the cryptocurrency crash. However, there are few robust sources who were blaming Elon musk for manipulating the price of bitcoin through his Twitter handle.
On the 13th of May, Elon Musk tweeted that tesla motors will not accept bitcoin as a payment method anymore. The announcement of Elon musk shattered the entire cryptocurrency industry, and bitcoin tumbled to an exceeding extent.
After five days of Elon musk’s announcement, China announced a cryptocurrency crackdown in the country. Cryptocurrency crackdown was more of a warning which made Chinese investors sell off their bitcoin, and in a nominal short term, investors panicked and blazed the trail of selling their cryptocurrencies.
Why Did China Announce A Bitcoin Ban?
As mentioned ahead, it was not the first time that china tried to ban bitcoin. The financial authorities of china have always underlined the volatility rendered by bitcoin as a vulnerable threat to the economic infrastructure of a country. Here are some of the reasons why china banned bitcoin in the country.
Bitcoin is exceedingly volatile in nature; all the more volatile nature of bitcoin have been witnessed multiple times by the significant players of the marketplace. The volatility rendered by the bitcoin complex is considered a threat to the financial system.
All the more, bitcoin leads to untraceable and unregistered transactions all over the globe, which makes it much easier for hacking elements and theft elements to exist freely. You might be wondering that bitcoin has processed an overall positive growth merely then. Why is China still banning bitcoin?
Bitcoin might have processed an overall parabolic growth, but the pace of this growth is just immense, which has led to the composition of a bubble, and the crypto bubble is expected to bust sooner or later as per the robust sauces. In a nutshell, china considers mitigating bitcoin as the best option for sustaining financial stability. All the more, bitcoin is an exceedingly decentralized cryptocurrency subjected to a peer-to-peer network that can be exposed to any illicit activity as per the higher authorities of china.
Existence of Yuan
China is the foremost country to launch a centric cryptocurrency of their own nation. Yuan was launched recently and is claimed to have a crucial impact on the economy of the country. Yuan is basic lay complexed on the core notion of cryptocurrencies like bitcoin and Ethereum as Yuan is correspondingly deployed on a public distributed ledger or blockchain.
Blockchain is basically a database subjected to an exceeding extent of transparency and accessibility. The blockchain of bitcoin processes information regarding bitcoin transactions, the mere personal detail compromised by the bitcoin complex is the wallet address which is a sequence of numbers and letters. The significant difference between bitcoin and Yuan is that bitcoin is decentralized, whereas Yuan is a centralized cryptocurrency.
Bitcoin mining is correspondingly one of the prominent reasons why Chinese authorities decided to ban bitcoin and altcoins. Bitcoin is basically a privately mined cryptocurrency; all the more energy consumption of bitcoin mining is enormous.
The mere power source which is consumed by bitcoin mining plants in china is electricity; the greenhouse gas emission led by the burning of fossil fuels in bitcoin mining is nearly 90 million metric tons, yes you read it right.
Crypto watchers are acknowledged with the fact that bitcoin mining is carried out to an exceeding extent in china as the mining chain of china was responsible for 60% of the hash rate in the bitcoin mining industry.
The energy consumption of bitcoin mining has impacted the environment in an extreme manner; all the more, if bitcoin mining in china continues for few years, the energy consumption will halt an amount of 300TWH by the end of 2024.
These are some of the reasons why china announced a cryptocurrency crackdown.
Thank you for reading!