China Cracks Down on Cryptocurrency Services

China Cracks Down On Cryptocurrency Services

( – Bitcoin was in freefall this week after China announced tough new clampdowns on cryptocurrency trading. The communist regime hates the anonymity provided by the decentralized payment methods and has been chipping away at them for years. Now, it’s moving in for the kill.

On May 18, the communist-run People’s Bank of China ordered financial institutions to stop providing any services related to cryptocurrencies, including opening accounts or trading. That triggered a massive sell-off, with Bitcoin’s value falling more than 14% on Wednesday. It made up some ground Thursday, but on Friday, the fall started again. Other cryptocurrencies, including #2 contender Ethereum, also took massive hits. Cryptocurrency exchanges have seen their systems crash as panicked investors rush to get their money out.

The future is also doubtful for China’s Bitcoin miners. Ironically, around two-thirds of Bitcoin mining occurs in China, where miners enter new Bitcoins into circulation. It has nothing to do with digging as in mining precious metals. Instead, these miners use very sophisticated computers which consume tons of energy, solving extremely complex computational math problems to verify the legitimacy of Bitcoin transactions.

Will the restricted use of Bitcoin in China impact the Bitcoin miners? Time will tell.

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