The Sino-US trade war has entered its fourth year. Former U.S. President Donald Trump saw a different result from what he initially expected: The United States was hit by higher tariffs and sanctions on Chinese companies and hardly benefited from them.it has cost There are as many as 245,000 jobs nationwide.American Chamber of Commerce Calculation This situation puts the exports of every country at risk. For example, the loss of Florida’s exports alone has reached 1.9 billion U.S. dollars.
At the same time, China has adopted a more sensible approach: it not only imposes reciprocal sanctions and exports its products through intermediate countries (Vietnam, Taiwan, and Mexico), but it also allows the United States to make unsecured and poorly regulated assets-cryptocurrencies Pay the bill.
The United States injects billions of dollars into the Chinese economy every year without even doubting it. The reason is that most bitcoins (Bitcoin), mainly exchanged for U.S. dollars around the world, and mined in China.it Host 65% of mines.
In order to obtain Bitcoin rewards, powerful computers can solve complex mathematical problems 24/7. Some of the newly mined coins go directly to the cryptocurrency exchange, while the rest can be kept in the miner’s crypto wallet, but will eventually be sold for U.S. dollars.Average 900 BTC is Mined Every day, the total daily income is approximately US$31 million (as of the end of June). This means that in just one year, the income of the miners exceeded 10 billion U.S. dollars.
Taking into account China’s share of mines, since last summer, the income of local miners is about 7 billion U.S. dollars. If the price and popularity of Bitcoin continue to rise, then revenue will double or even triple every year. In a certain way, money will circulate throughout the economy of the country: it will be spent, saved or invested.
Under the control of the party
The Chinese government is very aware of the volume and importance of U.S. dollar investments through cryptocurrencies. Despite increasingly strict regulations, it is clear that the authorities will not ban Bitcoin.
China Restricted Encrypted transactions between banks and payment companies in 2013. In 2017, the authorities also shut down local crypto exchanges and blocked access to foreign platforms. In other words, locals can always legally own cryptocurrency. What we are seeing is essentially a reminder of previous restrictions imposed on financial institutions, rather than introducing new restrictions.On the one hand, the Chinese authorities hope avoid “The transfer of personal risks to the social realm”, on the other hand, has also opened the door for foreign investors.
At the same time, the Chinese authorities began to restrict mining, which worries many people in the market.The official reason is that excessive energy consumption and carbon dioxide emissions prevent the country achieve Achieve carbon neutrality by 2060. But the actual situation is slightly different from the official statement.
First of all, Chinese miners have source In the southern provinces, the highly developed hydropower is cheaper, and only in the dry winter when they migrate to the north will they switch to fossil fuels.
Second, the authorities have completely banned new mining projects and existing mining projects in Qinghai, Inner Mongolia, and Xinjiang. Other provinces with abundant hydropower resources, such as Yunnan or Sichuan, are not eager to implement a comprehensive ban.Although Yunnan planning In late June, it was reported that only illegal BTC mines were shut down and “campaign against the abuse of electricity” All mines in Yunnan Province is closed.
The Chinese authorities seem to be rectifying things, rather than declaring war on cryptocurrencies. The technical restrictions on the supply of Bitcoin are good for China: it allows the country to influence the price of cryptocurrency while keeping it in the hands of miners without having to sell it on the financial market. However, if restrictions continue to tighten, mining rights may be redistributed among other countries/regions. Chinese mining equipment manufacturer—— BTC.TOP, Huobi and HashCow -Announced that they will suspend domestic sales and expand their international influence, including to North America.
Who would accept this idea
On the surface, the possibility of Chinese miners moving to North America seems to be beneficial to the United States. But experts point out that the African continent does not have a lot of idle energy capacity. In addition, mobile countries need time available to competitors.
The idea of not only controlling encrypted transactions but also controlling Bitcoin mining has quickly gained attention in developing countries.In Iran, mining has become one of the most accessible industries Among Severe sanctions by the United States. The Iranian government is taking almost the same path as China: The authorities will ban Use cryptocurrencies generated abroad, but they allow Use domestically mined coins to pay for imported goods. In the past year, Iran has earned more than 400 million U.S. dollars from cryptocurrency mining, while the U.S. has only doubled its revenue.
Another country planning to develop mining projects is El Salvador-the first Adopt Bitcoin as legal currency ——That American President Joe Biden Refuse visit. President of El Salvador Nayib Bukele (Nayib Bukele) consider Utilize “very cheap, 100% clean and 100% renewable” energy from local volcanoes.
In this context, Kazakhstan seems to be the most politically neutral country. Here, Enegix’s large-scale mining center with a capacity of 180 MW and up to 50,000 mining equipment will start operations in September.More importantly, Chinese mining equipment manufacturers Canaan has been established New service center in Kazakhstan.
China may use the exports of its crypto farms as a means to further weaken the U.S. economy, while the U.S. government does not have significant influence to prevent the outflow of dollars caused by crypto transactions. The implementation of a cryptocurrency ban on Americans is simply undemocratic.
The only option for the US government is to do everything possible to weaken the attractiveness of Bitcoin.This will explain why Elon Musk, the owner of some of the largest American companies, Tesla and SpaceX, suddenly Switch from supporting Bitcoin to Criticize its environmental impact.
The same thing happened to Greenpeace Don’t accept crypto donations anymore, Although this has been the case for the past seven years. It seems that the escalating campaign against Bitcoin is more about politics than the environment.
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.
The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Alex Axelrod He is the founder and CEO of Aximetria and Pay Reverse. He is also a serial entrepreneur with more than ten years of experience in leading technical roles. Served as the big data director of JSFC AFK Systems R&D Center. Prior to this, Alex worked at Mobile TeleSystems, Russia’s largest telecommunications provider, responsible for the development of anti-fraud and network security systems.