The Hanging Sword Finally Dropped
Hey there! How have you been?
I got a question for you: What did you feel when the Chinese government officially announced that they’re banning cryptocurrency and cryptocurrency transaction in their country?
Were you surprise? Angry? Disappointed perhaps? Or maybe you just didn’t care that a country that used to be a hub of cryptocurrency mining and trading officially declared cryptocurrency illegal?
Personally, I wasn’t too surprise that the Chinese government banned cryptocurrency. When the CCP cracked down on cryptocurrency mining in Xinjiang, many people anticipated that they would soon ban cryptocurrency in the country for good – and I’m one of them.
To be honest, I think the banning was long overdue. For years, China was the world’s foremost cryptocurrency mining hub. And for the cryptocurrency industry, China being the foremost mining hub wasn’t really a good thing.
Why? It’s because of the Chinese Communist Party or the CCP.
Cryptocurrencies are decentralized digital currency. Meaning no government could control it. For the CCP, digital currencies that were not in their control could not be allowed in their country. But since it’s a new technology that could potentially disrupt the current financial system; the CCP allowed it to exist in China for several years.
The Chinese government’s seemingly tacit approval of cryptocurrency gave people, its citizens and foreigners alike a false sense of security. Also, due to the country’s cheap electricity, many cryptocurrency miners transfer their crypto-mining projects to China – allowing the country to become the cryptocurrency mining capital of the world.
It was a huge mistake. China didn’t approve of cryptocurrencies. The Chinese government simply allowed Bitcoin and other cryptocurrencies to exist in China so that they could study the technology closely. The CCPs real goal was to develop their own cryptocurrency – a CBDC or China’s Central Bank Digital Currency – the Digital Yuan.
For many years, a sword was hanging on the industry’s head, or maybe a ticking time bomb is the right words? And although many had noticed the signs, most people purposely chooses to ignore them, maybe because they’re blinded by the potential profit. But not too long ago that sword had dropped on everyone’s head – China had finally banned cryptocurrency.
However, even though the industry had suffered because of it, the effect wasn’t as bad as anticipated. It’s probably because the crackdown months prior were enough of a warning. Before the banning, major crypto-mining project had moved out of the country – a move that prevented a possible major market crash.
The Industry Would Only Grow Stronger After China’s Ban
The cryptocurrency industry might have suffered a little bit after China’s ban but I believed that in the long run; cryptocurrency would only grow stronger.
Sure, losing hundreds of thousands, possibly millions of Chinese cryptocurrency investors, miners, and traders was such a shame. But considering the kind of government they have, there’s really nothing that outsiders like us could do.
The most that we could do was pray that they could somehow find a way to circumvent the ban and continue trading with cryptocurrencies. It seemed like an unlikely scenario but people could also be very creative. For all we know, our Chinese brothers and sisters might have already found a way and were experimenting with it.
Anyways, now that the hanging threat that was China is out of picture; the cryptocurrency industry would have more breathing space. No longer do we have to constantly worry that the CCP would ban cryptocurrency today, tomorrow or in the future. Basically, we don’t have to care about the CCP and their thoughts on the cryptocurrency industry.
That said the industry would still need time to fully recover and grow so don’t expect to see your favorite cryptocurrencies to moon anytime soon. The other benefit of China’s cryptocurrency ban is that we could now focus on other threats. Like for example, the new cryptocurrency bill inserted into Biden’s new infrastructure bill.
Personally though, I think that the greatest benefit of the ban was the fact that cryptoming mining projects were no longer centered in one country. I think everyone had heard the saying of not putting all of the eggs in one basket. Well, it applies to cryptocurrency too. Probably, more so than other…
I don’t think I still need to explain why putting all of the eggs in one basket were a bad idea. I mean, just look at what happened when the CCP started cracking down on cryptocurrency mining. Miners from all over China scuttled like headless flies in search of countries to mover their operation to. It was not a pleasant sight, or rather, it was pathetic.
Moreover, if China did the ban when the industry was a lot weaker compared to what it was now, the effect would have been a lot worse. The industry should really thanks its lucky star that it was stronger and have a lot more supporters – supporters that could prop it up when it was down.
So how about you? Do you also think that China’s banning of all cryptocurrency (with the exception of the Digital Yuan) beneficial to the industry as a whole? Whether you agree or not, please do share your thoughts in the comment section.
Well, that’s all for now. Thanks for reading. Cheers!
Lead Image Source: Pixabay
Disclaimer: This article was checked for plagiarism using the online tool; plagiarism detector, and was proven to be 100% original.
My other articles: https://read.cash/@beastion
