There is a lot of news and rumors in the crypt world, but the facts are few. This is especially true of the imminent government action that could or will destroy investors’ wealth.
At the moment: News all over the internet reports that the Chinese government is banning the extraction of Bitcoin.
Fact # 1. An act not done.
Some well-known bloggers with a large audience give readers the impression that the ban will definitely happen. The truth is, this proposal is still under close scrutiny.
Fact # 2. Nothing unexpected.
Chinese miners have seen this handwriting on the wall since Beijing banned trading in the second half of 2017.
Even at that time, many miners in China realized that they could be the next to stay ahead of the government. So any large Chinese mining company should already have a plan in place to move to a more friendly environment.
Fact # 3. The Bitcoin protocol is not affected.
Nowhere in the Bitcoin Protocol is it stated that Chinese miners are required to extract BTC.
Just as a network does not depend on a single entity to ensure network security through a Proof of Work consensus.
On the contrary, Bitcoin was created as a borderless system where anyone with the necessary resources can participate as a validator.
Thus, even if the Chinese mines are closed, they will be replaced immediately by the other party. Moreover, reduced competition will make Bitcoin mining even more profitable for those still participating in the system.
Fact # 4. Potentially good for decentralization.
A common rumble about Bitcoin is that a small portion of China’s mines hold most of the world’s hash capacity (a “resource” of mining), something that could jeopardize BTC’s decentralization.
If others have a better chance of competing with China’s mining giants, it could increase Bitcoin’s decentralization.
Fact # 5. Peanuts compared to the bear market in 2018.
Veteran miners have become shockproof, one of the biggest was the 85% drop in Bitcoin prices.
Beijing’s mining ban is a small part of it.
Moreover, as we explained in our 23-page report, we now have …
First, the introduction of leading cryptocurrencies has made great strides, especially when it comes to upstream transactions. On average, the volume of these transactions has more than tripled in the last year.
Second, these advances have been driven primarily by the transformation of industry-dominant technologies, particularly the transition from Proof of Work to Proof of Stake consensus algorithm. Although these innovations come with compromises, the general industrial sector is developing rapidly.
And thirdly, as we looked at these trends in our report, a few people were aware of these positive trends, and most investors are still in the dark. Even though crypt prices have risen this month, they are still very low overall.
The combination gives investors the best of both worlds – more importantly better fundamentals plus at the same time extremely low entry rates.
Translation: Lucreds Plus OÜ