Nic Carter, co-founder of Coin Metrics, says he is happy that Chinese officials have called for a ban on Bitcoin mining.
In a new statement from the Chinese Deputy Prime Minister Liu He and the State Council recently; It was stated that this move is part of the country’s effort to “steadfastly prevent and control financial risks”:
“We will focus on reducing credit risks, strengthening control of the financial activities of platform businesses, increasing pressure on Bitcoin mining and trading behavior, and resolutely preventing individual risks from being transferred to the social sphere.”
China first banned Bitcoin trading and the issuance of cryptocurrency supplies (ICOs) in 2017. Carter says he believes new moves from China could actually strengthen the Bitcoin network and increase energy efficiency.
“This situation is not a surprise. This is a continuation of what has already begun. Mining activities had already been banned in the largely coal-fired Inner Mongolia region. Is this good or bad? People like me wanted and expected it to happen… I was looking forward to it and glad it came true. ”
First of all, this reduces China’s ability to potentially influence Bitcoin. At one point, they had a chance to use China-based hashrate to launch an attack on Bitcoin. This was not something I thought was very likely, but now, by continuing to ban mining, China will not have any leverage or ability to do so, whether they want to.
Second, this is positive as long as the focus is on Bitcoin’s carbon footprint. As we all know, there are many types of coal in China, some of which are used for mining. China is reducing Bitcoin’s total carbon emissions by banning mining in coal-fired places. It; It is an effective subsidy for western, cleaner-based miners and therefore significantly improves the emission factor of the Bitcoin network. This is something we should celebrate. ”
Carter adds that if a significant number of Chinese miners are out of business, concerns that Bitcoin will become less secure are unfounded:
“Will this make Bitcoin less secure? Not exactly. The security of Bitcoin doesn’t really increase with a single marginal unit of hashrate. Bitcoin is extremely secure. It is safe on many thresholds. Even if the hashrate drops 50-80%, it is still considered safe. If the hashrate is offline, the worst scenario could be that the blocks are a week or two slower. It really is. In short, this is good for Bitcoin’s climate impact. It reduces China’s power over Bitcoin and doesn’t really affect its security. This is a good thing.”