Bitcoin (BTC) miners in China are having a hard time. The government is acting on its word and several Chinese provinces have ordered miners to stop. It is clear that this has an impact on Bitcoin, as is the hash rate nearly halved, approaching an annual low. Despite this all looking bad, the glass is half full for me.
Bitcoin (BTC) proves its strength
The reason for my positivity is the fact that we now see what Bitcoin is good at. Yes, miners in China are being chased out of the tent, but Bitcoin continues to run happily. No country, company or person (I’m looking at you Elon Musk) can shut down the network or determine which direction the network should go.
This is the likely reason that Bitcoin creator and developer, the mysterious Satoshi Nakamoto, remains and will remain anonymous. No one knows who he or she is and so no one can put pressure on any aspect of Bitcoin. And in a world that is unfair to many people, this is exactly what we need.
Another development that makes me feel positive is how Chinese miners are dealing with the situation. A lot of miners will indeed sell their mining machines. But we also see a huge number of miners pack their bags and ship their miners. That is another strength of Bitcoin, the miners are mobile and can therefore go wherever they want.
The hash rate, also known as the computing power of the network, is currently making its biggest drop in absolute numbers. However, my expectation is that once the mining machines have arrived at their destination, for example in Kazakhstan, the hash rate will start to rise again. An additional advantage is that Chinese miners no longer make up the majority of the computing power of the Bitcoin network, so a plus for the decentralization! Hopefully this will immediately bring some peace to the market.
On the other side of the world
While the situation for Bitcoin in China is bad to say the least, on the other side of the world it’s a different story. That is where Bitcoin is embraced for its powers. El Salvador has accepted bitcoin as legal tender with which the ‘unbanked‘ can store, send, receive and pay with digital value with ease.
Bitcoin gives these El Salvadorans the chance to participate in the economy without having to pay high transaction costs for sending value, for example. Moreover, the country is no longer dependent solely on the monetary policy of the United States.
We have always had people screaming bloody murder within both the traditional financial world and certainly the crypto world. Looking beyond the falling prices, I see some very positive signs. China can no longer stop the crypto train, which is now really starting to accelerate.
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