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China’s call for a crackdown on crypto mining and trading last week has worried players in the industry. Just days after Chinese Vice Premier Liu He’s statement, crypto exchanges Huobi and OKEx likewise announced the suspension of some crypto services, which many believed to connected to the crackdown.
With the future of the crypto mining industry at stake, mining firms have been closely monitoring the issue as well. For instance, Btc.top’s CEO Jiang Zhuoer shared his take on the situation.
“According to the minutes of ‘China Financial Stability Board:’ We resolutely prevent and control financial risk…. we shall crack down Bitcoin mining and crypto trading activities in order to prevent individual risks from being spread to the social level,” Zhuoer said, according to Bitcoin.com.
“From there, we can see that the main spirit of the meeting is to ‘prevent and control financial risks,’ to restrain social capital from flowing into the crypto mining sector which might lead to risks transferring from individuals to the whole society,” Zhuoer shared his analysis on the Vice Premier’s announcement. “In other words, individual mining is and has always been allowed as long as you’re responsible for your own risks and profits, whilst the mining operated by financial capital might be [forbidden].”
According to Zhuoer, the outcome might not be as bad as most people think though there might be losses for big players. “Large [datacenters] and major veteran miners may suffer a significant loss this time, while the whole Bitcoin network will be as resilient as always,” Zhuoer said.
The CEO also shared what he thinks the worst possible outcome would look like. “The worst scenario would be: large datacenters are shut down and we go back to old days in 2014-15,” Zhuoer said. “Small miners install several miners at home; Medium miners set dozens of miners in a warehouse or a few hundred miners in a factory; Veteran miners find a small remote hydroelectric power plant and locate there a couple thousand miners.”
The mining exec concluded that Bitcoin mining operations will continue to exist in Chna. However, large miners will likely be out of the picture and be replaced by home, small or medium-sized mining operations.
