The fact does stand China exercises enormous influence in the cryptocurrency industry. According to Ripple CEO Brad Garlinghouse, nowadays China-based cryptocurrency conglomerates are getting a dominant share of the market, ultimately making the world’s most populous country a leading provider of digital assets.
During the latest 2018 Stifel Cross Sector Insight Conference previously highlighted by Coinspeaker, Garlinghouse marked a towering influx of Chinese miners that has currently gained control over 50% of the Bitcoin hash-rate. He concluded saying China has all chances to become a single centralized supervisor of cryptocurrencies.
Indeed, Chinese companies like chipmaker Bitmain and its subsidiaries, BTC.com and AntPool came dangerously close to holding the world’s majority of the Bitcoin mining pools. Recently Bitmain has reported a whopping $3-4 billion in profits mining Bitcoins in 2017 occupying a 51 percent stake in the Bitcoin hash-rate. The announced statistics has triggered a wave of concerns amidst cryptocurrency community while early adopters of an initially decentralized digital currency considered moving their hash power to other mining pools.
Today Chinese government once again has approached the crypto sphere with a set of upcoming restrictions. An autonomous region in northwest China, Xinjiang Uyghur for quite a time has been attracting cryptocurrency miners due to its vast land resources, abundant electricity, and moderate weather. However, Xinjiang’s authorities have warned local Bitcoin mining enterprises to close their illegal operations before August 30, 2018.
By illegal mining operations, the body is referring to unauthorized “mining” enterprises that fail to go through the formalities of industrial and commercial registration, tax registration, social security, and other insurances under national laws and regulations.
In the statement made on July21, the Xinjiang Economic and Information Commission explained such a move saying that owing to a beneficial mining climate the region became a target number one for a vast majority of mining farms including one ignorant to local regulations. Furthermore, the authority criticized significant electricity usage by mining companies and demanded local utility suppliers forcefully shut down such companies.
Similarly, another document surfaced on the internet in January 2018, where Xinjiang’s local authorities were supposed to report the progress of miners exiting the region. Xinjiang’s commission also requested authorities to be cautious when dealing with Bitcoin mining companies in June 2017.
Before Xinjiang’s crackdown on cryptocurrencies, Bitmain, the world’s largest Bitcoin mining company based in China, announced on November 2016 that it was planning to open a mining data-center in the region. However, the company hasn’t provided any update after the initial announcement.
The first hit of the unfolding campaign was reported by a Canadian blockchain startup that has a few business partners operating in Xinjiang. Almost immediately after the new regulations were put in motion, it became impossible for them to hold on cryptocurrency mining in the region. Consequently these two companies were forced to move away from Xinjiang and build farms from scratch at the new location.
Sofiko is a freelance fintech copywriter at Coinspeaker.
With a Bachelor degree in International Business and Economics, Sofiko has been deepening her knowledge of an agile innovative industry primary focusing on the robust blockchain technology and cryptocurrencies. As a bank employee, Sofiko particularly keens on crypto and blockchain integration into the established banking systems.